Withsecure — Q2 2023 Earnings Presentation
11 slides from Withsecure's earnings presentation, July 2023
Slide 1: Market uncertainty reflected in the new outlook; Q2 2023 Highlights
Market uncertainty reflected in the new outlook; new products launched to strengthen co- security approach Q2 2023 Highlights Juhani Hintikka, President and CEO Tom Jansson, CFO
Slide 2: Key takeaways from Q2 2023
Key takeaways from Q2 2023 Cloud portfolio • Cloud ARR increased by 21% to EUR 81.9 million (EUR 67.5 million) • Cloud NRR was 107% • Cloud revenue grew by 20% year-on-year to EUR 20.3 million • UK, US and Japan did not meet expectations • DACH, France performed well On-premise products revenue decl
Slide 3: Key takeaways from Q2 2023
Key takeaways from Q2 2023 Profitability • Adjusted EBITDA EUR -7.9 million • Impact of cost savings partly offset by • One-off salaries in Q2 (EUR 1.5 million) • Marketing expenses related to SPHERE’23 (EUR 1.1 million) Market and products • Cloud Security Posture Management • 5th module of Element
Slide 4: Outlook for 2023
Outlook for 2023 Outlook for 2023 (updated on 11 July 2023) 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 revenue fr
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 +21% Cloud revenue and ARR 80.2 81.5 81.9 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 • UK, US and Japan markets fell below growth expectat
Slide 6: On-premise revenue and ARR
On-premise revenue and ARR (EUR million) On-Premise ARR 34.5 On-premise revenue and ARR 32.0 31.8 -8% 28.8 29.9 28.6 28.0 30.2 27.1 27.6 • Revenue and ARR declining 26.1 25.9 25.0 25.3 • Customers are transferring to cloud- based environments Q1/20 Q2/20 Q3/20 Q4/20 Q1/21 Q2/21 Q3/21 Q4/21 Q1/22 Q2/
Slide 7: Cyber Security Consulting – not yet recovered from the Q1 financial sector slowdown
Cyber Security Consulting – not yet recovered from the Q1 financial sector slowdown (EUR million) Cyber security consulting revenue Cyber security consulting revenue • Many WithSecure customers operate in financial / 12.4 -6% 12.0 banking sector, going though economic uncertainty 11.6 11.2 11.1 • So
Slide 8: Deferred Revenue declining slightly for lower revenue and increasing share of SaaS contracts
Deferred Revenue declining slightly 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 63.5 63.5 62.5 sc
Slide 9: Q2 profitability
Q2 profitability (mEUR) 4-6/2023 4-6/2022 Change % 1-6/2023 Revenue 34.8 32.5 7% 70.1 Gross Margin 24.0 20.7 16 % 48.4 of revenue, % 68.9 % 63.9 % 69.1 % Other operating income 1) 0.1 0.5 -74 % 0.6 Operating expenses 1) -32.0 -30.9 4% -63.3 Sales & Marketing -19.9 -20.5 3% -37.3 Research & Developme
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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