Inside information, profit warning: WithSecure Corporation lowers its 2023 cloud ARR, cloud revenue, total revenue, and profitability outlook

WithSecure Corporation, Stock Exchange Release, 11 July 2023, 19:30 EEST

Inside information, profit warning: WithSecure Corporation lowers its 2023 cloud ARR, cloud revenue, total revenue, and profitability outlook

WithSecure Corporation revises its cloud ARR, cloud revenue, total revenue, and profitability outlook for 2023.

The company now expects its cloud ARR to grow 18 – 24% from the previous year (previous outlook: 28 – 34%). In the end of 2022, cloud ARR was EUR 80.2 million.

Cloud revenue growth outlook is reduced to 18 – 24% (previous outlook: 28 – 34%). Previous year revenue from cloud products was EUR 68.7 million.

Total revenue growth outlook is reduced to 6 – 12% (previous outlook: 12 – 20%). Previous year revenue was EUR 134.7 million.

Adjusted EBITDA is expected to improve from previous year. Adjusted EBITDA of fourth quarter of 2023 is expected to be between EUR -4 million and EUR +1 million (previous outlook: Adjusted EBITDA of fourth quarter of 2023 will be positive).

Rationale for updating the outlook

Cyber security market is subject to some slowness and increased competition that have impacted WithSecure’s revenue more than previously estimated. In addition, the company has identified areas for operational improvements. Especially in some markets, the first half performance deviates significantly from the plans, while others are performing according to previous estimates. To reflect the uncertainty related to the market recovery, WithSecure lowers its cloud ARR, cloud revenue and total revenue outlook.

WithSecure has taken measures to improve the profitability through cost savings. With the lower revenue estimate, the company estimates that it might not yet reach a positive Adjusted EBITDA in the fourth quarter of 2023. Overall, becoming profitable in Adjusted EBITDA remains a high priority for WithSecure.

New outlook for 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 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 will be between EUR -4 million and EUR +1 million.

Previous 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.

Total revenue of the group will grow by 12 – 20% 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 positive.

Contact information:

Laura Viita,
Vice President, Controlling, investor relations and sustainability
WithSecure Corporation
+358 50 487 1044
[email protected]