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Sidechannel, Inc. (SDCH)
:SDCH
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SideChannel
(OTC:SDCH)
Rating:64Neutral
Price Target:―
SideChannel (SDCH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$25.16M
Dividend YieldN/A
Average Volume (3M)398.59K
Price to Earnings (P/E)―
Beta (1Y)1.12
Revenue Growth11.98%
EPS Growth88.55%
CountryUS
Employees20
SectorTechnology
Sector Strength95
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)0.00
Shares Outstanding231,229,050
10 Day Avg. Volume257,283
30 Day Avg. Volume398,594
Financial Highlights & Ratios
PEG Ratio-0.16
Price to Book (P/B)11.77
Price to Sales (P/S)0.00
P/FCF Ratio24.93
Enterprise Value/Market Cap1.19
Enterprise Value/Revenue18.26
Enterprise Value/Gross Profit69.40K
Enterprise Value/Ebitda-0.90
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
SideChannel Business Overview & Revenue Model
Company DescriptionSideChannel, Inc. provides cybersecurity solutions. It offers RealCISO, a software platform that helps companies to understand and manage cyber risk. The company also provides virtual chief information security officer (vCISO), virtual chief privacy officer, risk assessments, cybersecurity compliance, risk management, training and awareness, and team building and staffing services. It serves clients in healthcare (tech), life sciences/bio tech, energy, technology, infrastructure/industrial, research institutes, legal, finance, and DoD/defense industrial base sectors. The company was formerly known as Cipherloc Corporation and changed its name to SideChannel, Inc. in July 2022. SideChannel, Inc. was incorporated in 1953 and is based in Austin, Texas.
How the Company Makes MoneySideChannel makes money primarily through consulting fees and service contracts. By offering tailored cybersecurity solutions, the company earns revenue from ongoing advisory services and implementation of security measures. Key revenue streams include subscription-based contracts for continuous monitoring services, one-time fees for specific projects like security architecture design, and premium pricing for emergency incident response. SideChannel may also have strategic partnerships with technology vendors, which can provide additional revenue through joint service offerings or referral agreements.
SideChannel Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q2-2025)
| % Change Since: 120.00%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Positive
The earnings call highlighted SideChannel's improved profitability, operational efficiency, and strategic focus on key products like Enclave, while also acknowledging challenges in specific segments and competitive pressures. Despite a slight decrease in revenue, the overall financial health and strategic direction appear positive.Q2-2025 Updates
Positive Updates
Improved Profitability and Operational Efficiency
Despite a 1.7% decrease in year-over-year revenue, SideChannel improved its gross margin to 49.7%, up nearly 5 percentage points from the same quarter last year. Operating expenses were reduced by 11.2%, and the net loss was narrowed to $54,000 from $253,000 in the previous year.
Cash Flow and Cash Position
SideChannel reported a positive cash flow from operations for the fifth consecutive quarter, ending the period with $1.3 million in cash, cash equivalents, and short-term investments.
Revenue Growth in First Half of FY 2025
Year-to-date revenue increased by 3.8% compared to the first half of FY 2024, demonstrating resilience and execution across the company's core offerings.
Strategic Focus on Enclave Product
SideChannel continues to focus on accelerating the adoption of its Enclave product, which is gaining attention as a zero trust network solution among public and private sector organizations.
Negative Updates
Challenges in vCISO Services Segment
The company faced challenges in its vCISO services segment due to the loss of larger contracts in the previous fiscal year, impacting trailing 12-month revenue retention.
Competitive Headwinds for Enclave
Enclave faces competition from larger companies like Illumio and Zscaler. The challenge lies in distinguishing the product through ease of deployment, cost efficiency, and the ability to sell effectively.
Company Guidance
During the SideChannel Fiscal Year 2025 Second Quarter Financial Results Update Call, the company reported a 1.7% year-over-year revenue decrease but highlighted improvements in several key financial metrics. The gross margin increased to 49.7%, reflecting a disciplined approach to cost management and enhanced service delivery margins. Operating expenses were reduced by 11.2%, resulting in a narrowed net loss of $54,000, compared to a $253,000 loss in the same quarter the previous year. Year-to-date revenue reached $3.7 million, marking a 3.8% increase from the first half of FY 2024. The company ended the quarter with $1.3 million in cash, cash equivalents, and short-term investments, demonstrating strong cash management and operational efficiency. Despite challenges in the vCISO services segment, SideChannel is focused on the growth of its Enclave product, a zero trust network solution, as a long-term growth driver. The company remains optimistic about future prospects and continues to invest in sales capabilities to capitalize on the rising demand for cybersecurity solutions.SideChannel Financial Statement Overview
Summary
SideChannel shows strong revenue growth and cash flow improvements, with significant financial stability due to its strong equity position and lack of debt. However, ongoing net losses and negative return on equity highlight the need for enhanced profitability and efficiency.Income Statement
SideChannel's income statement shows significant improvement in revenue growth, with a TTM increase of 15.2% from the previous year. The gross profit margin stands at 47% in TTM, indicating efficient cost management. However, the company is still operating at a net loss with a net profit margin of -11.3% and an EBIT margin of -11.7%, reflecting ongoing challenges in achieving profitability. The EBITDA margin is also negative, at -9.8%, but improving from previous periods.65
Positive
Balance Sheet
The balance sheet reveals a strong equity position with an equity ratio of 70.2% in TTM, which indicates financial stability. The absence of debt reduces financial risk, but the return on equity is negative at -32.5%, suggesting inefficiencies in generating returns for shareholders. The company has a healthy cash position, which provides a buffer for future operations.70
Positive
Cash Flow
SideChannel's cash flow statement is robust, with a significant improvement in operating cash flow, resulting in a positive free cash flow of $551,000 in TTM. The free cash flow growth rate is 88.7%, highlighting strong cash generation capabilities. The operating cash flow to net income ratio is positive, indicating that the company is converting its earnings into cash effectively. However, continued negative net income remains a concern.78
Positive
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 7.40M | 6.57M | 4.79M | 2.80M | 47.98K |
| Gross Profit | 3.53M | 3.33M | 2.32M | 1.26M | -576.00K |
| EBITDA | -748.00K | -2.08M | 340.00K | 511.00K | -6.95M |
| Net Income | -904.00K | -7.01M | -11.78M | -3.10M | -6.97M |
Balance Sheet | |||||
| Total Assets | 3.95M | 3.98M | 10.77M | 6.75M | 1.83M |
| Cash, Cash Equivalents and Short-Term Investments | 1.29M | 1.05M | 3.03M | 5.78M | 1.08M |
| Total Debt | 0.00 | 50.00K | 50.00K | 0.00 | 1.10M |
| Total Liabilities | 1.25M | 954.00K | 1.37M | 1.49M | 1.97M |
| Stockholders Equity | 2.70M | 3.03M | 9.40M | 5.27M | -137.96K |
Cash Flow | |||||
| Free Cash Flow | 292.00K | -1.98M | -396.00K | -3.63M | -6.68M |
| Operating Cash Flow | 307.00K | -1.95M | -396.00K | -3.63M | -6.65M |
| Investing Cash Flow | -265.00K | -32.00K | 3.59M | 0.00 | -28.97K |
| Financing Cash Flow | -50.00K | 0.00 | -511.00K | 8.33M | -84.57K |
SideChannel Technical Analysis
Neutral
0.11
Price Trends
0.08
Positive
0.06
Positive
0.05
Positive
Market Momentum
<0.01
Positive
38.29
Neutral
30.46
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SDCH, the sentiment is Neutral. The current price of 0.11 is below the 20-day moving average (MA) of 0.13, above the 50-day MA of 0.08, and above the 200-day MA of 0.05, indicating a neutral trend. The MACD of <0.01 indicates Positive momentum. The RSI at 38.29 is Neutral, neither overbought nor oversold. The STOCH value of 30.46 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SDCH.
SideChannel Risk Analysis
SideChannel disclosed 57 risk factors in its most recent earnings report. SideChannel reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
SideChannel Peers Comparison
Overall Rating
UnderperformOutperform
Sector (69)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | ¥234.25B | 15.00 | 7.54% | 2.58% | 9.28% | 5.90% | |
64 Neutral | $25.16M | ― | -24.34% | ― | 11.98% | 88.55% | |
49 Neutral | $12.12M | ― | 163.42% | ― | -30.70% | 82.02% | |
41 Neutral | $35.41M | ― | -133.62% | ― | 18.07% | 85.59% | |
35 Underperform | $14.41M | ― | -254.58% | ― | ― | -20.33% | |
34 Underperform | $2.48M | ― | 470.97% | ― | ― | -8852.46% | |
| ― | $33.36M | ― | -215.99% | ― | ― | ― |
* Technology Sector Average
Performance Comparison
SDCH
SideChannel
0.09
0.05
125.00%
INTZ
Intrusion
1.78
0.68
61.82%
BNAI
Brand Engagement Network
0.34
-1.25
-78.62%
ATCH
AtlasClear Holdings
0.16
-16.03
-99.01%
CISO
Cerberus Cyber Sentinel Corp
1.00
0.56
127.27%
HUBC
Hub
3.50
-4.22
-54.66%
SideChannel Corporate Events
Product-Related AnnouncementsBusiness Operations and Strategy
SideChannel to Exhibit at 2025 Global Force Symposium
Neutral
Feb 19, 2025
On February 19, 2025, SideChannel announced its participation as an attendee and exhibitor at the 2025 Global Force Symposium, scheduled for March 25-27 in Huntsville, Alabama. The event provides a platform for SideChannel to showcase its Enclave platform, already deployed by two Department of Defense agencies, and to engage with prospective clients on cybersecurity compliance and risk mitigation. This participation underscores SideChannel’s commitment to the defense industry and its role in supporting the Pentagon’s cybersecurity standards.
Business Operations and StrategyFinancial Disclosures
SideChannel Reports Q1 Revenue Growth and Expansion Plans
Positive
Feb 5, 2025
SideChannel reported its financial results for the first quarter of the fiscal year ended September 30, 2025, highlighting a revenue increase of 9.9% to $1.9 million compared to the previous year. The company is focused on expanding its sales and marketing team to boost revenue growth and aims to drive adoption of its Enclave platform, continue acquiring new vCISO clients, and expand its cybersecurity solutions with existing clients.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.