Correction: SSH COMMUNICATIONS SECURITY CORPORATION FINANCIAL STATEMENT RELEASE JANUARY 1 – DECEMBER 31, 2023
SSH Communications Security Corporation | Stock Exchange Release | February 22, 2024 at 12:10:00 EET
Correction to the SSH Communications Security Financial Statement Release 2023 published on February 22, 2024 at 9:00 am. There was a mistake in the table on page 5 of the Financial Statement Release. The correct change percentage for the full year maintenance sales is -5.0 (the incorrect number was 8.2). The corrected Financial Statements Release (PDF) is attatched to this release.
Net sales growth 5.4%, ARR of EUR 19.3 million, EBITDA of EUR 1.8 million for 2023
October–December 2023:
· Net sales totaled EUR 5.5 million (5.8 million)
· EBITDA was EUR 0.5 million (1.2 million)
· Operating loss (EBIT) was EUR –0.4 million (0.4 million)
· Loss for the period was EUR -0.5 million (0.2 million)
· Earnings per share was EUR -0.02 (EUR 0.00)
January–December 2023:
· Net sales totaled EUR 20.3 million (19.3 million)
· EBITDA was EUR 1.8 million (2.7 million)
· Operating loss (EBIT) was EUR -1.6 million (-0.4 million)
· Loss for the period was EUR -2.3 million (-0.6 million)
· Earnings per share was EUR -0.10 (EUR -0.05)
Operating cash flow was EUR 3.2 million (EUR 3.0 million). The equity ratio was 49.2% (46.1%). Liquid assets including short-term liquid investments were EUR 3.7 million (EUR 5.7 million).
Key Figures
| EUR million | 10–12/2023 | 10–12/2022 | Change % | 1–12/2023 | 1–12/2022 | Change % |
| Net sales | 5.5 | 5.8 | -5.7 | 20.3 | 19.3 | 5.4 |
| EBITDA | 0.5 | 1.2 | -56.2 | 1.8 | 2.7 | -32.7 |
| % of net sales | 9.6 | 20.7 | -53.6 | 8.9 | 13.9 | -35.7 |
| Operating profit/loss | -0.4 | 0.4 | -192.2 | -1.6 | -0.4 | -311.7 |
| % of net sales | -6.8 | 7.0 | -197.7 | -8.1 | -2.3 | -252.3 |
| Profit/loss before taxes | -0.5 | 0.0 | -2.4 | -0.7 | -345.2 | |
| Profit/loss | -0.5 | 0.2 | -368.4 | -2.3 | -0.6 | -385.9 |
| Return on equity, % | -22.8 | -5.2 | -338.5 | |||
| Return on investment, % | -19.1 | -4.7 | -306.4 | |||
| Liquid assets | 2.2 | 5.7 | -61.4 | |||
| Short-term liquid investments | 1.5 | |||||
| Gearing (%) | 3.0 | -27.9 | 110.8 | |||
| Equity ratio (%) | 49.2 | 46.1 | 6.7 | |||
| Earnings per share, EUR | -0.02 | 0.00 | -0.10 | -0.05 | -82.6 | |
| Shareholders' equity per share, EUR | 0.25 | 0.29 | -11.0 | 0.25 | 0.29 | -9.1 |
| Recurring revenue, ARR | 19.3 | 18.4 | 4.9 | |||
| Subscription revenue, ARR | 11.5 | 9.9 | 16.2 | |||
| Invoicing | 5.9 | 11.2 | -47.2 | 18.3 | 24.2 | -24.4 |
| Deferred revenue | 12.6 | 14.1 | -10.6 | |||
| Current | 10.2 | 10.6 | -4.5 | |||
| Non-current | 2.4 | 3.5 | -30.6 |
SSH Communications Security provides alternative performance measures which are not defined by IFRS standards. Alternative performance measures should not be considered substitutes for performance measures in accordance with the IFRS. The alternative performance measures are:
EBITDA = Operating profit/loss + depreciation and amortization.
Recurring Revenue, ARR: Subscription + maintenance revenue at the end of the last month of the reported period multiplied by 12.
Subscription ARR: Subscription revenue in the last month of a reported period multiplied by 12.
Invoicing: Invoices sent during the reported period without VAT.
Deferred Revenue: Non-recognized revenue from invoiced maintenance and subscription sales.
The complete financial statements release is attached to this release (pdf) and is also available on our website.
CEO review
Dear Customers, Shareholders, Partners, and Colleagues,
SSH succeeded in several initiatives during 2023, withstanding lower license sales in Q4 affecting our financial results. Net sales grew by 5% to EUR 20.3 million, and EBITDA was positive at EUR 1.8 million (2022 EUR 2.7 million), representing 9% of net sales. Q4 sales was EUR 5.5 million (EUR 5.8 million in Q4/2022).
We create industrial-grade software for major global corporations and sell these primarily as subscription software. The deferred revenue was EUR 12.6 million (2022 EUR 14.1 million) due to a reduction in the invoicing of a multi-year subscription and some maintenance contracts. Subscription Annual Recurring Revenue (ARR) grew by 16% to EUR 11.5 million, and Total Annual Recurring Revenue grew by 5%, reaching EUR 19.3 million.
Our cash position is satisfactory. Operating cash flow was EUR 3.2 million (2022 EUR 3.0 million) for 2023. The company's cash position decreased due to non-recurring transactions: Deltagon acquisition installment and financing costs by a total of EUR 2.2 million during 2023. Our total liquidity, including cash, cash equivalents, and liquid short-term investments, was EUR 3.7 million.
During the fourth quarter, we won major new customers, including a new Fortune 500 listed company in the USA. During 2023, PrivX grew 29% in subscription sales and gained several new customers in the MSP and OT sectors.
We launched the Secure Messaging solution during the fourth quarter. This solution enables secure interactions through messages, files, videos, and calls, complementing our Secure Collaboration product family. The solution allows for secure, auditable business communications.
Microsoft has repositioned Azure AD from directory services to centralized identity management as Microsoft Entra. We are focusing on adding our PAM capabilities to complement Microsoft Entra for users who have privileged access to critical and sensitive data and systems.
During 2023 we completed our transition towards a recurring revenue business model. We continue to influence the Identity and Access Management (IAM) market by delivering innovative and future-proof technologies.
Business Outlook for 2024
We expect net sales to grow during 2024 compared to 2023. We estimate EBITDA and cash flow from operating activities to be positive for 2024. At the end of 2023, our Annual Recurring Revenue was EUR 19.3 million (EUR 18.4 million in 2022). Our net sales grew by 5.4% to EUR 20.3 million in 2023, and EBITDA was 1.8 million in 2023.
The complete financial statements release is attached to this release (pdf) and is also available on our website.
Financial reporting of SSH Communications Security in 2024
During 2024, SSH Communications Security Corporation publishes the following financial information:
- FY 2023 Financial Statements Bulletin: February 22, 2024
- FY 2023 Annual Report: released during Week 11
- Business Review, January–March (Q1): April 24, 2024
- Half-year report, January–June (Q2): July 18, 2024
- Business Review, January–September (Q3): October 24, 2024
SSH Communications Security Corporation's Annual General Meeting is planned for Monday, March 25, 2024, in Helsinki, Finland.
SSH Communications Security follows a silent period starting 30 days before the publication of its financial information.
Helsinki, February 22, 2024
SSH COMMUNICATIONS SECURITY
Board of Directors
Teemu Tunkelo
CEO