Inside information, profit warning: F-Secure lowers full year 2023 revenue and adjusted EBITA outlook

Inside information, profit warning: F-Secure lowers full year 2023 revenue and adjusted EBITA outlook

F-Secure lowers its outlook for the year 2023 revenue and adjusted EBITA due to weaker than expected business performance during the third quarter. Slower than anticipated conversion to enhanced F-Secure Total offering as well as some delays in deliveries in partner business have had a negative impact on the revenue development in the second half of 2023. Lookout Life growth has been pushed forward due to longer sales cycles and challenges in our own execution capability in the first months after the acquisition.

Consumer sentiment continues to be low with consumers showing caution in subscribing to new services and increased price sensitivity. This has continued to hamper our direct business performance and lead to a decision to decrease our short-term investment into direct business demand creation which in turn lowers our revenue forecast for the second half of 2023.

Also, fluctuation of exchange rates has had a negative impact on F-Secure performance.

The lower-than-estimated adjusted EBITA is a result of the weak revenue development. F-Secure management is working on actions to ensure profitability even in the situation where the growth is delayed from original plan.

Updated outlook for 2023:

Growth: F-Secure estimates that revenue for 2023 will be in the range of EUR 128–132 million.

Profitability: The group’s adjusted EBITA is expected to be in the range of EUR 41–45 million. The adjusted EBITA margin is estimated to temporarily decrease in 2023 due to acquisition related additional OPEX investments of about EUR 3 million to ensure successful integration and drive revenue synergies.

Background for the outlook:

• F-Secure expects the cyber security market to grow in 2023, although we see strong price sensitivity among the consumers, in the face of a challenging operating environment.
• Lookout consumer BU included from June to December (7 months).
• Lookout consumer BU has received payments in advance related to part of its revenue. Such payments are recognised as deferred revenue. As part of the acquisition, F-Secure fair values the deferred revenue according to IFRS reporting for the purposes of acquisition balance sheet, thus the revenues recognised post-acquisition related to deferred revenue balances will be lower compared to revenue recognised by Lookout consumer BU for those advance payments. The preliminary negative revenue impact included in the outlook is estimated to be approximately EUR 3.2 million in 2023, and negative EBITA-level impact in the outlook approximately EUR 2.6 million, respectively.

Previous outlook for 2023 (issued 1 June, 2023):

Growth: In 2023, F-Secure expects revenue to exceed EUR 134 million.

Profitability: The group’s adjusted EBITA is expected to exceed EUR 45 million. The adjusted EBITA margin is estimated to temporarily decrease in 2023 due to acquisition related additional OPEX investments of more than EUR 3 million to ensure successful integration and drive revenue synergies.

F-Secure will publish its Interim Report for January–September 2023 on 25 October, 2023.

For further information, please contact:
Sari Somerkallio, Chief Financial Officer
tel. +358 40 3569251
[email protected]

F-Secure in brief
F-Secure is Finland headquartered and globally operating consumer cyber security company. F-Secure offers award-winning security and privacy products and services that make every digital moment more secure, for everyone. F-Secure operates in over 100 countries, has ~200 Service Provider partners and is the global leader providing security through Communication Service Providers. F-Secure Corporation is listed on Nasdaq Helsinki Ltd. Read more: www.f-secure.com.