WithSecure Financial Statement Release 1 January – 31 December
2024: Strong growth in Cloud Protection for Salesforce, improving
profitability and cash flow, divestment of Cyber security
consulting
WithSecure Corporation, Financial Statement Release 1 January –
31 December 2024, 12 February 2025 at 8.00 EET
WithSecure Financial Statement Release 1 January – 31
December 2024: Strong growth in Cloud Protection for Salesforce,
improving profitability and cash flow, divestment of Cyber security
consulting
Highlights of October – December 2024 (“fourth
quarter”)
- Annual Recurring
Revenue (ARR)1 for Elements Cloud products and
services2 increased by 6% to EUR 83.3 million (EUR 78.4
million)
- Elements Cloud ARR
increase from previous quarter was 2%
- Net Revenue
Retention for Elements Cloud was 99%
- Revenue for Elements
Cloud increased by 9% to EUR 21.5 million (EUR 19.7 million)
- ARR for Cloud
Protection for Salesforce increased by 52% to EUR 12.8 million (EUR
8.4 million)
- Cyber security
consulting revenue declined by 15% to EUR 8.6 million (EUR 10.2
million). Cyber security consulting divestment agreement was signed
in January 2025. Business is reported as Discontinued operations. A
goodwill impairment of EUR 13 million was recognized in the fourth
quarter to reflect the impact of the divestment
- Adjusted EBITDA
(Continuing and discontinued operations) for WithSecure was EUR 2.4
million (EUR 0.2 million)
- Operative cash flow
of the fourth quarter was EUR 7.7million (EUR 2.7
million)
- Annual recurring
revenue (ARR) of cloud products is calculated by multiplying
monthly recurring revenue of last month of quarter by twelve.
Monthly recurring revenue includes recognized revenue within the
month excluding non-recurring revenue
- Elements Cloud
includes Elements Cloud portfolio software and services as well as
the managed services
Highlights of January – December 2024
- Revenue for Elements
Cloud products and services increased by 9% to EUR 83.3 million
(EUR 76.1 million)
- CPSF revenue
increased by 14% to EUR 9.4 million (EUR 8.3 million)
- Cyber security
consulting revenue declined by 3% to EUR 32.3 million (EUR 33.4
million)
- Adjusted EBITDA
(Continuing and discontinued operations) for WithSecure was EUR 3.1
million (EUR -16.1 million)
Outlook for 2025
Annual Recurring Revenue (ARR) for Elements Cloud products and
services will grow by 10-20% from the end of 2024.
At the end of 2024, Elements Cloud ARR was EUR 83.3 million.
Elements Company segment's Adjusted EBITDA will be 3-7% of
revenue.
Annual Recurring Revenue (ARR) for Cloud Protection for
Salesforce (CPSF) will grow by 20-35% from the end of 2024.
At the end of 2024, CPSF ARR was EUR 12.8 million.
Cyber security consulting business will be divested in 2025.
Elements company and CPSF will have their own guidance going
forward. Both are recurring, subscription-based businesses, which
is reflected in the new guidance.
Medium-term financial target (for Elements Company
segment)
Over the next three years (2025-2027), WithSecure will
become a “Rule of 30+” company.
The components of the target are
- Annual revenue
growth as percentage
- Adjusted EBITDA as
percentage of revenue
WithSecure is targeting to reach a sum of the components that
exceeds 30.
Figures in this release are unaudited. Figures in brackets refer
to the corresponding period in the previous year, unless otherwise
stated. Percentages and figures presented may include rounding
differences and might therefore not add up precisely to the totals
presented.
CEO Antti Koskela
In the last quarter of 2024, WithSecure Elements Cloud ARR grew
by 6% from previous year to EUR 83.3 million (EUR 78.4 million).
Elements Cloud revenue grew by 9% to EUR 21.5 million (EUR 19.7
million). Cloud Protection for Salesforce, reported as a separate
segment, performance was strong, ARR grew by 52% to EUR 12.8
million (EUR 8.4 million).
In the Elements Company, Elements software continued to perform
with a strong year-on-year growth. In the Managed services and
Co-security, revenue declined slightly from the fourth quarter of
2023, due to the customer churns reported in the quarter and
earlier in 2024. Of the geographic regions, Elements Cloud ARR and
revenue decreased slightly in UK and North America, mainly impacted
by the Managed services customer churns during the year 2024. In
all other regions, a steady growth of cloud ARR and revenue
continued. December revenue includes a higher than customary volume
of discounts, timing of which is partly dependent on the customers.
Due to the timing issues, the Cloud ARR growth was negatively
impacted by approximately 3 percentage points. Our intention is to
review and improve the recognition process to avoid ARR volatility
caused by timing in the future.
In January 2025, our Elements Identity Security reached General
Availability. It will increase protection of the users from
business email compromise attacks and provide easy-to-use identity
response features. Two significant product recognitions were
received at the end of 2024. We were identified as one of 15 global
vendors in the 2024 Gartner® Magic Quadrant™ for Endpoint
Protection Platforms3, recognising our ability to
execute and completeness of vision. In the 2024 MITRE
ATT&CK® Evaluations, our Endpoint Detection and Response
solution set new standards for detection-to-alert ratios,
reinforcing our position as a European mid-market leader in cyber
security.
Elements Company Adjusted EBITDA in the fourth quarter was EUR
1.5 million (EUR -1.0 million). Full WithSecure Adjusted EBITDA of
EUR 2.4 million (EUR 0.2 million) in the fourth quarter shows that
our continuous work on improving profitability is giving results
despite some lower revenue in 2024 than planned.
In Cloud Protection for Salesforce (CPSF), systematic efforts in
the past year to improve sales efficiency are generating strong
results. ARR grew by 52% year-on-year to EUR 12.8 million (EUR 8.4
million). The growth is driven by both new customers and expansions
to existing customers, while the customer churn remained at a
controlled level. We continue to develop the CPSF as an independent
business inside WithSecure, while keeping the strategic review
options open.
On 23 January 2025, we signed an agreement intending to divest
our Cyber security consulting business to Neqst, a Swedish
investment firm focusing exclusively on technology and
technology-enabled companies. In the segment reporting, consulting
is presented according to the previously applied calculation
principles. In other parts of the financial reporting, consulting
result is included in the result of discontinued operations. Cyber
security consulting revenue declined by 15% to EUR 8.6 million (EUR
10.2 million). Adjusted EBITDA of the fourth quarter was EUR 0.9
million (EUR 2.0 million).
After reaching some important milestones during the year, we are
confidently heading for a new year of profitable growth. I would
like to thank WithSecure personnel, partners, customers and other
stakeholders for their great collaboration in the past year and
going forward.
Financial performance
|
(mEUR) |
10-12/2024 |
10-12/2023 |
Change % |
1-12/2024 |
1-12/2023 |
Change % |
|
Continuing operations |
|
|
|
|
|
|
|
Revenue |
29.9 |
28.0 |
7% |
116.0 |
109.9 |
6% |
|
Cost of revenue |
-5.9 |
-5.7 |
3% |
-23.4 |
-23.1 |
1% |
|
Gross Margin |
24.0 |
22.3 |
8% |
92.6 |
86.8 |
7% |
|
% of revenue |
80.4 % |
79.7 % |
|
79.8 % |
79.0 % |
|
|
Other income, adjusted1 |
0.4 |
0.4 |
11% |
2.0 |
1.4 |
41% |
|
Operating expenses1 |
-23.0 |
-24.3 |
-5% |
-92.6 |
-103.1 |
-10% |
|
Sales & Marketing |
-12.2 |
-13.1 |
-7% |
-47.9 |
-57.2 |
-16% |
|
Research & Development |
-8.5 |
-8.8 |
-3% |
-35.0 |
-36.3 |
-4% |
|
Administration |
-2.3 |
-2.4 |
-5% |
-9.7 |
-9.5 |
2% |
|
Adjusted EBITDA2 |
1.4 |
-1.6 |
188% |
2.0 |
-14.8 |
113% |
|
% of revenue |
4.7 % |
-5.7 % |
|
1.7 % |
-13.5 % |
|
|
Items affecting comparability (IAC) |
|
|
|
|
|
|
|
Other items |
0.0 |
-1.0 |
99% |
-1.0 |
-1.4 |
33% |
|
Divestments |
0.1 |
0.0 |
0% |
1.2 |
1.4 |
10% |
|
Restructuring |
-0.1 |
-4.5 |
99% |
-1.1 |
-8.9 |
87% |
|
Costs under TSA |
0.0 |
-1.4 |
100% |
0.0 |
-6.9 |
100% |
|
Income for costs under TSA |
0.0 |
1.4 |
100% |
0.0 |
6.9 |
100% |
|
EBITDA |
1.4 |
-7.2 |
120% |
1.1 |
-23.8 |
105% |
|
% of revenue |
4.7 % |
-25.6 % |
|
1.0 % |
-21.6 % |
|
|
Depreciation & amortization, excluding PPA3 |
-2.0 |
-2.5 |
-19% |
-9.0 |
-9.5 |
-6% |
|
PPA amortization |
-0.5 |
-0.6 |
-17% |
-2.2 |
-2.4 |
-7% |
|
EBIT |
-1.1 |
-10.2 |
89% |
-10.1 |
-35.7 |
72% |
|
% of revenue |
-3.7 % |
-36.6 % |
|
-8.7 % |
-32.5 % |
|
|
Adjusted EBIT2 |
-0.6 |
-4.1 |
85% |
-7.0 |
-24.3 |
71% |
|
% of revenue |
-2.0 % |
-14.5 % |
|
-6.0 % |
-22.1 % |
|
|
Discontinued operations |
|
|
|
|
|
|
|
Revenue |
8.3 |
10.0 |
-17% |
31.4 |
32.9 |
-5% |
|
Adjusted EBITDA2 |
1.0 |
1.8 |
-45% |
1.1 |
-1.3 |
187% |
|
% of revenue |
12.0 % |
18.1 % |
|
3.6 % |
-4.0 % |
|
|
Items affecting comparability (IAC) |
|
|
|
|
|
|
|
Divestments |
1.1 |
|
|
1.1 |
|
|
|
EBIT |
-13.6 |
1.6 |
-927% |
-29.3 |
-8.2 |
-258% |
|
% of revenue |
-164.1 % |
16.5 % |
|
-93.6 % |
-24.9 % |
|
|
Combined operations |
|
|
|
|
|
|
|
Revenue |
38.1 |
38.0 |
0% |
147.4 |
142.8 |
3% |
|
Adjusted EBITDA2 |
2.4 |
0.2 |
1070% |
3.1 |
-16.1 |
119% |
|
% of revenue |
6.3 % |
0.5 % |
|
2.1 % |
-11.3 % |
|
|
Earnings per share, (EUR)4 |
-0.08 |
-0.07 |
-25% |
-0.22 |
-0.23 |
5% |
|
Deferred revenue |
|
|
|
67.7 |
66.9 |
1% |
|
Cash flow from operations before financial items and taxes |
7.7 |
2.7 |
191% |
2.1 |
-19.9 |
110% |
|
Cash and cash equivalents |
|
|
|
27.3 |
36.6 |
-25% |
|
ROI, % |
-52.3 % |
-27.5 % |
-90% |
-34.1 % |
-30.5 % |
-12% |
|
Equity ratio, % |
|
|
|
59.1 % |
73.3 % |
-19% |
|
Gearing, % |
|
|
|
0.4 % |
-22.2 % |
102% |
|
Personnel, end of period |
|
|
|
961 |
1,087 |
-12% |
1. Excluding Items Affecting Comparability (IAC) and
depreciation and amortization. In 2023 excludes also costs of
services provided to F-Secure under TSA and equivalent income
charged for TSA services.
2. Adjustments are material items outside the normal course of
business associated with acquisitions, integration, restructuring,
gains or losses from sales of businesses and other items affecting
comparability. For reconciliation and a breakdown of adjusted
costs, see Note 6 (Reconciliation of alternative performance
measures)
3. Amortization of intangible assets from business combinations
(PPA, purchase price allocation, related amortizations).
4. Based on the weighted average number of outstanding shares
during the period 175 986 422 (1-12/2024).
Events after period-end
After the end of the financial year, on 23 January 2025, WithSecure
announced the sale of its Cyber security consulting business to
Swedish investment firm Neqst. The transaction is executed by the
sale of shares of the parent company of a
to-be-established WithSecure cyber security consulting
group, to which the consulting business will be transferred prior
to the completion of the transaction. As a result of the agreement,
total of approximately 250 employees located
in Finland, UK, Sweden, Denmark, Singapore, Italy,
and US are expected to transfer to the buyer.
Additional information
This is a summary of WithSecure’s Financial Statement Release 1
January – 31 December 2024. The full report is a PDF file attached
to this stock exchange release. Full report is also available on
the company website.
Webcast
WithSecure’s CEO Antti Koskela and CFO Tom Jansson will present the
results in a webcast on 12 February starting at 14.00 EET. The
webcast will be held in English and can be accessed at
https://withsecure.events.inderes.com/q4-2024
Questions in written format are requested in the webcast portal.
Presentation material and the webcast recording will be available
on the company website
Materials | Investor Relations | WithSecure™
Financial calendar
During the year 2025, WithSecure Corporation will publish financial
information as follows:
- 25 April 2025:
Interim Report for January–March 2025
- 16 July 2025:
Half-Year Report for January–June 2025
- 22 October 2025:
Interim Report for January–September 2025
WithSecure observes at least a three-week (21 days) silent
period prior to publication of financial reports, during which it
refrains from engaging in discussions with capital market
representatives or the media regarding WithSecure’s financial
position or the factors affecting it.
The Annual General Meeting is scheduled for Tuesday, 18 March
2025. The Board of Directors will convene the meeting.
Contact information
Tom Jansson, CFO
WithSecure Corporation
Laura Viita
VP, Controlling, investor relations and sustainability
WithSecure Corporation
+358 50 487 1044
investor-relations@withsecure.com
- Financial Statement Release 1 January - 31 December 2024
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