Withsecure — Q3 2023 Earnings Presentation
11 slides from Withsecure's earnings presentation, 2023
Slide 1: Progressing on profitability in a challenging market
Progressing on profitability in a challenging market Q3 2023 Highlights Juhani Hintikka, President and CEO Tom Jansson, CFO
Slide 2: Key takeaways from Q3 2023
Key takeaways from Q3 2023 Cloud portfolio • Cloud ARR increased by 13% to EUR 81.2 million (EUR 71.7 million) • Cloud NRR was 102% • Cloud revenue grew by 14% year-on-year to EUR 20.5 million • Slower but positive growth in all geographic areas • DACH, France continued to perform well • Growth in a
Slide 3: Key takeaways from Q3 2023
Key takeaways from Q3 2023 Profitability • Adjusted EBITDA EUR -2.3 million • Impact of 1H2023 cost savings becoming visible, decrease of opex approximately EUR 4 million from previous quarter • Comparative opex of Q3 2022 is an estimate without TSA work for F-Secure; not fully comparable Goodwill i
Slide 4: Outlook for 2023
Outlook for 2023 Outlook for 2023 (updated on 11 July 2023, unchanged) Annual recurring revenue (ARR) for cloud products will grow by 18 – 24% from the end of 2022. At the end of 2022, cloud ARR was EUR 80.2 million. Revenue from cloud products will grow by 18 – 24% from previous year. Previous year
Slide 5: Cloud revenue and ARR impacted by market slowness and competition
Cloud revenue and ARR impacted by market slowness and competition (EUR million) Cloud ARR +13% Cloud revenue and ARR 80.2 81.5 81.9 81.2 71.7 • Cloud revenue impacted by market 67.5 60.9 64.1 slowness and competition 55.5 51.5 41.7 42.5 43.2 45.5 47.0 • Year-on-year growth in all products and all ge
Slide 6: On-premise revenue and ARR
On-premise revenue and ARR (EUR million) On-Premise ARR On-premise revenue and ARR 34.5 32.0 31.8 28.8 29.9 28.6 30.2 -10% • Revenue and ARR declining 28.0 27.1 27.6 26.1 25.9 25.0 25.3 23.6 • Customers are transferring to cloud- based environments Q1/20 Q2/20 Q3/20 Q4/20 Q1/21 Q2/21 Q3/21 Q4/21 Q1/
Slide 7: Cyber Security Consulting – recovering from the 1H23 slowdown
Cyber Security Consulting – recovering from the 1H23 slowdown (EUR million) Cyber security consulting revenue Cyber security consulting revenue • Spend of financial sector customers returning to the 12.4 12.0 earlier level 11.6 -5% 11.2 11.1 • Order backlog improving 10.8 10.2 10.0 9.7 9.4 8.9 8.9 8
Slide 8: Deferred Revenue declining for lower revenue and increasing share of SaaS contracts
Deferred Revenue declining for lower revenue and increasing share of SaaS contracts (WithSecure, deferred revenue1, EUR million) •Orders are recognized after customer commitment, while deferred revenue is 70.3 69.2 67.9 67.7 68.6 recognized according to invoicing 66.4 66.0 65.7 63.5 63.5 62.5 schedu
Slide 9: Q3 profitability
Q3 profitability (mEUR) 7-9/2023 7-9/2022 Change % 1-9/2023 1-9/2022 Change% Revenue 34,8 33,5 4% 104,8 98,3 7% Gross Margin 24,2 21,9 10 % 72,6 63,9 14 % of revenue, % 69,5 % 65,3 % 69,3 % 65,0 % Other operating income 1) 0,2 0,9 -76 % 1,0 1,8 -43 % Operating expenses 1) -26,6 -26,8 0% -90,0 -86,4
Slide 10: Medium-term financial targets
Medium-term financial targets Medium term financial targets (unchanged) Growth Target: To double revenue organically by the end of 2025 (from year 2021 comparable revenue of EUR 122.8 million) Profitability Target: Adjusted EBITDA break-even by the end of 2023 and adjusted EBITDA margin of some 20%
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