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WithSecure Corporation, Interim report January - September 2023: Progressing on profitability in a challenging market


WithSecure Corporation, Interim report January - September 2023, 18 October 2023 at 8:00 EEST

Interim report 1 January – 30 September 2023


Highlights of July – September 2023 (“third quarter”)

  • Annual Recurring Revenue (ARR) (1) for cloud products (2) increased by 13% to EUR 81.2 million (EUR 71.7 million)
  • ARR decreased from previous quarter by 0.9%
  • Net Revenue Retention for cloud products was 102%
  • Revenue from cloud products increased by 14% to EUR 20.5 million (EUR 17.9 million)
  • Revenue from on-premise products decreased by 12% to EUR 5.9 million (EUR 6.7 million)
  • Revenue from cyber security consulting decreased by 5% to EUR 8.4 million (EUR 8.9 million)
  • Adjusted EBITDA was EUR -2.3 million (EUR -4.0 million)
  • Items affecting comparability (IAC) of EBITDA were EUR -0.2 million (EUR +1.0 million)
  • Consulting-related goodwill was impaired by EUR 6.2 million in the third quarter
  • WithSecure signed a new three-year EUR 20 million revolving credit facility with OP Corporate Bank

Highlights of January – September 2023

  • Revenue from cloud products increased by 21% to EUR 60.7 million (EUR 50.0 million)
  • Revenue from on-premise products decreased by 10% to EUR 18.4 million (EUR 20.5 million)
  • Revenue from cyber security consulting decreased by 7% to EUR 25.7 million (EUR 27.7 million)
  • Adjusted EBITDA was EUR -16.3 million (EUR -17.2 million – Estimated comparable EBITDA) (3)
  • Items affecting comparability (IAC) of EBITDA were EUR -3.4 million (EUR -4.3 million). Of this, EUR -4.4 million related to restructuring activities of the first quarter, and EUR +1.4 million to valuation of earn-out from previously divested business

(1) 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 revenues

(2) Cloud products are Elements, Cloud Protection for Salesforce and Managed Services
(3) Estimated comparable EBITDA is used for previous periods to ensure comparability. For explanation, see Note 6 (Reconciliation of alternative performance measures)

WithSecure completed the separation of its Consumer security business into an independent company F-Secure through a partial demerger on 30 June 2022. In this report, WithSecure is presenting consumer security business until its demerger in 2022 as Discontinued operations under IFRS 5. Previous income statements are restated accordingly. For full disclosure of demerger-related presentation, please refer to Note 7 (Discontinued operations).

Figures in this report 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.

Outlook for 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 revenue from cloud products was EUR 68.7 million.

Total revenue of the group will grow by 6 – 12% from previous year. Previous year revenue was EUR 134.7 million.

Adjusted EBITDA will improve from previous year. Previous year’s Adjusted EBITDA (Estimated comparable EBITDA for two first quarters) was EUR -23.2 million. Adjusted EBITDA of fourth quarter of 2023 will be between EUR –4 million and EUR +1 million.

Medium-term financial targets (unchanged)

WithSecure medium-term financial targets:

  • 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% by 2025

WithSecure annual strategy process is ongoing. Medium-term financial targets will be reviewed as part of the process.

CEO Juhani Hintikka

In the third quarter of 2023, cyber security market continued to be impacted by the economic slowness and strong competition. WithSecure cloud ARR grew by 13% from the previous year. Cloud revenue grew by 14% and was EUR 20.5 million (EUR 17.9 million). The growth rates are not satisfactory in comparison with our overall targets.

Our efforts to reach profitability are progressing. We reported an EBITDA loss of EUR –2.3M (EUR - 4.0 million) in the third quarter. The operating expenses compared to the second quarter of 2023 have declined by approximately EUR 4 million because of our first half restructuring activities. Becoming EBITDA positive continues to be a high priority for WithSecure.

Despite the overall headwinds, revenue grew in all main cloud products. Main drivers of growth were EDR (Endpoint detection and response), as well as Collaboration Protection, protecting Microsoft users from potential malicious content from entering through downloaded external content. New products introduced in the second quarter, in our main marketing event Sphere, reached their General Availability in early October, and they are showing early positive signs.

In MDR (Managed detection and response), the market continues to be very competitive. Our shift into mid-market customer segments progressed well in the third quarter, especially in the DACH region.

Cloud Protection for Salesforce content protection revenue and ARR development was below our expectations, especially in the third quarter. We continue to believe that there is a good market opportunity for this product in the longer term, but the sales are currently impacted by the customers’ strong cost control. 

Despite the disappointing growth rates in the third quarter, cloud revenue year-on-year growth continued in all our main markets. We believe that focusing on the right market sectors and complementing the high-quality products with a selection of co-security services offered through a strong network of partners will differentiate WithSecure from the competitors’ offering.

In cyber security consulting, revenue declined by 5% from last year and was EUR 8.4 million (EUR 8.9 million). Order backlog improved in the third quarter. Due to the lowered revenue estimates, as well as the impact of increasing interest rates, we recorded an impairment of the consulting-related goodwill of EUR 6.2 million in the third quarter.

Financial performance

(mEUR)7-9/20237-9/2022Change %1-9/20231-9/2022Change %1-12/2022
Revenue 34.833.54 %104.898.37 %134.7
Cloud-based security products 20.5 17.9 14 % 60.7 50.0 21 % 68.7
On-premise security products 5.9 6.7 -12 % 18.4 20.5 -10 % 27.2
Cyber security consulting 8.4 8.9 -5 % 25.7 27.7 -7 % 38.8
Cost of revenue -10.6 -11.6 9 % -32.2 -34.4 6 % -47.0
Gross Margin 24.2 21.9 10 % 72.6 63.9 14 % 87.7
of revenue, % 69.5 % 65.3 % 69.3 % 65.0 % 65.1 %
Other operating income 1) 0.2 0.9 -76 % 1.0 1.8 -43 % 2.3
Operating expenses 1) -26.6 -26.8 0 % -90.0 -86.4 4 % -116.7
     Sales & Marketing -15.2 -18.6 19 % -52.4 -57.9 10 % -79.1
     Research & Development -8.2 -5.9 38 % -27.6 -21.8 27 % -28.4
     Administration -3.3 -2.3 46 % -10.0 -6.6 51 % -9.2
Adjusted EBITDA 2)-2.3-4.044 %-16.3-20.621 %-26.7
of revenue, % -6.5 % -12.0 % -15.6 % -21.0 % -19.8 %
Items affecting comparability (IAC)
Other items -0.1 -0.4
Restructuring -0.1 -4.4
Divestments 0.4 100 % 1.4 -2.8 -150 % -1.5
Demerger 0.7 100 % -1.5 100 % -1.8
EBITDA-2.5-3.017 %-19.7-24.921 %-29.9
of revenue, % -7.1 % -8.9 % -18.8 % -25.3 % -22.2 %
Depreciation & amortization, excluding PPA 3) -2.5 -2.5 0 % -7.6 -7.4 3 % -10.1
Impairment -6.2 -6.2
PPA amortization -0.6 -0.6 5 % -1.8 -1.8 3 % -2.5
EBIT-11.8-6.193 %-35.3-34.23 %-42.6
of revenue, % -33.8 % -18.2 % -33.7 % -34.8 % -31.6 %
Estimated comparable EBITDA-2.3-4.044 %-16.3-17.25 %-23.2
of revenue, % -6.5 % -12.0 % -15.6 % -17.5 % -17.3 %
Adjusted EBIT 2)-4.8-6.527 %-23.9-28.115 %-36.8
of revenue, % -13.7 % -19.4 % -22.8 % -28.6 % -27.3 %
Result for the period (Discontinued operations)468.5100 %468.5

(mEUR)7-9/20237-9/2022Change %1-9/20231-9/2022Change %1-12/2022
Performance indicators
Earnings per share, (EUR) (continuing operations) 4) -0.06 -0.03 -111 % -0.16 -0.17 7 % -0.22
Deferred revenue (continuing operations) 65.7 67.7 -3 % 68.6
Cash flow from operations before financial items and taxes -9.0 -11.8 24 % -22.5 -10.7 -111 % -14.1
Cash and cash equivalents 30.0 75.1 -60 % 55.1
ROI, % -33.3 % -15.5 % -115 % -30.9 % -31.3 % 1 % -30.5 %
Equity ratio, % 79.1 % 79.7 % -1 % 79.0 %
Gearing, % -18.3 % -41.9 % 56 % -39.9 %
Personnel, end of period 1,147 1,280 -10 % 1,295

1) Excluding Items Affecting Comparability (IAC) and depreciation and amortization. Q3 2022 onwards 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 175,499,660 (1-9/2023). Earnings per share has been recalculated for comparative periods using average weighted share amount after share issues.

Events after period-end

No material changes regarding the company’s business or financial position have taken place after the end of the quarter.

Additional information

This is a summary of WithSecure’s Interim report 1 January – 30 September 2023. The full report is a PDF file attached to this stock exchange release. Full report is also available on the company website.


WithSecure’s CEO Juhani Hintikka and CFO Tom Jansson will present the results in a webcast starting at 14.00 EEST. The webcast will be held in English and can be accessed at

WithSecure Q3 2023 Interim Report (

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

WithSecure will publish its financial information release dates of 2024 later in the fourth quarter.

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.

Contact information

Tom Jansson, CFO

Laura Viita, VP, Controlling, investor relations and sustainability
+358 50 487 1044


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