WithSecure (WITH) investor relations material

Executive summary

• Elements Cloud and Core Security software revenue grew, offsetting a 22% decline in Managed Services ARR due to large UK customer churn, with new product launches advancing proactive threat management.

• Cloud Protection for Salesforce (CPSF) ARR surged 54% year-over-year, driven by new customer acquisition and expansions.

• Divestment of consulting and Malaysian entities completed, with new partnerships in Japan, Netherlands, and Finland, and focus shifted to core cloud-based offerings.

• Announced global reorganization and restructuring to align costs with reduced Managed Services, targeting €6.5 million in annual savings.

• Gross margin improved to over 81%, reflecting efficiency gains and favorable currency movements.

Financial highlights

• Elements Cloud and Core Security Services ARR grew 13% year-over-year, reaching €84.9 million, driven by new products and partner expansion.

• Managed services revenue declined 22% year-over-year due to churn from a large UK enterprise customer.

• Group revenue from continuing operations increased 3–4% year-over-year, with gross margin rising to 81.1–81.2%.

• Adjusted EBITDA for the quarter was positive, with Q2 at €0.2 million and H1 at €1.5 million, a material improvement from the previous year.

• Operating expenses reduced by 3% year-over-year, with R&D costs down 10%.

Outlook and guidance

• No change to outlook; strong pipeline expected to drive ARR growth acceleration in H2.

• Elements ARR expected to grow 10–20% for the year; Cloud Protection for Salesforce ARR to grow 20–35%.

• Elements Company EBITDA expected between 3–7% of revenue.

• Medium-term target to achieve "Rule of 30+" (revenue growth % + adjusted EBITDA % > 30) by 2027.