Withsecure — Q4 2022 Earnings Presentation
12 slides from Withsecure's earnings presentation, February 2023
Slide 1: Cloud ARR grew by 32%, consulting continues to improve
Cloud ARR grew by 32%, consulting continues to improve Q4 2022 Highlights Juhani Hintikka, President and CEO Tom Jansson, CFO
Slide 2: Key takeaways from Q4/2022
Key takeaways from Q4/2022 Growth in cloud-based corporate security products • Comparable revenue grew by 29% year-on-year to EUR 18.7 million • Annual recurring revenue (ARR) grew by 32% to EUR 80.2 million • Elements products performing well, especially EDR • Market situation causing some slowness
Slide 3: Markets and strategy
Markets and strategy Market and strategy • Strong demand for cyber security products and services continues • Improved security outcomes to customers: • Microsoft Teams protection completing the offering for Microsoft 365 Collaboration protection • Server share protection introduced as a new feature
Slide 4: Change negotiations
Change negotiations • WithSecure announced on 9 Feb 2023 that it will start change negotiations, to improve profitability and increase competitiveness • Estimated annual savings EUR 14 million (reductions of personnel and other cost saving measures), starting in Q2 2023 • Estimated impact 120 positi
Slide 5: Revenue from Corporate Security Products
Revenue from Corporate Security Products (EUR million) Cloud revenue +29% Comparable revenue from cloud Q1 – Q4/2021 adjusted for comparability 18.7 products grew by 29% 17.9 15.2 16.8 • Some slowness in customer decision- 14.5 13.2 making in Q4, pushing orders to the end 12.5 10.4 10.7 11.1 11.6 of
Slide 6: Annual Recurring Revenue
Annual Recurring Revenue (EUR million) Cloud ARR +32% Annual Recurring Revenue (ARR) 80.2 71.7 +12% • Strong orders in the end of quarter 60.9 64.1 67.5 driving ARR growth 55.5 47.0 51.5 • Total ARR 106.1 million – exceeding 100 45.5 41.7 42.5 43.2 million threshold for the first time • ARR for on-p
Slide 7: Cyber Security Consulting impacted by divestments
Cyber Security Consulting impacted by divestments (EUR million) Cyber security consulting revenue Cyber security consulting revenue • Divestments of UK public sector consulting 12.4 12.0 +3% (December 2021) and South African subsidiary 11.6 11.2 11.1 (February 2022) impact comparability between year
Slide 8: Deferred Revenue at strong level
Deferred Revenue at strong level (WithSecure, Deferred Revenue1, EUR million) • Orders are recognized after customer commitment, while deferred revenue is 67.9 67.7 68.6 recognized according to invoicing 66.4 66.0 63.5 63.5 62.5 schedule • Some large multi-year contracts are split 23.3 22.2 22.9 24.
Slide 9: Q4 profitability – activities increased to regular levels in 2022
Q4 profitability – activities increased to regular levels in 2022 Change Change WithSecure, EUR million 10-12/2022 10-12/2021 1-12/2022 1-12/2021 % % Revenue 36.4 34.5 5% 134.7 130.0 4% Cloud-based corporate security solutions 18.7 14.7 27 % 68.7 52.7 30 % On-premise corporate security solutions 6.6
Slide 10: Guidance
Guidance Outlook for 2023 Annual recurring revenue (ARR) for cloud products will grow by 28–34% from the end of 2022. At the end of 2022, cloud ARR was EUR 80.2 million. Revenue from cloud products will grow by 28–34% from previous year. Previous year revenue from cloud products was EUR 68.7 million
Slide 11: Annual Report 2022
Annual Report 2022 New, comprehensive Sustainability Report, based on the W/Sustainability program
Slide 12: Slide 12