SSH Communications Security (SSH1V) Q2 2024 earnings summary

Executive summary

• Net sales grew 4.1% year-over-year in Q2 2024 to EUR 5.1 million, with EBITDA rising to EUR 0.5 million from EUR 0.1 million and subscription ARR up 8.2%; PrivX subscription sales increased 21.2%.

• Profitability improved due to efficiency gains and cost controls, with organizational restructuring and leadership changes completed.

• ISO/IEC 27001:2022 certification and national security clearance from Finnish Defense Forces were achieved.

• New customer wins and partnerships, including CANCOM Austria and Deloitte Finland, and major product launches such as PrivX 35 and SalaX.

• APAC region saw 44% business growth, while Europe was flat and the U.S. showed slight growth; pipeline expanded across all regions.

Financial highlights

• Net sales: EUR 5.1 million in Q2 2024, up from EUR 4.9 million in Q2 2023; EBITDA: EUR 0.5 million (vs. EUR 0.1 million); EBIT: EUR -0.5 million (vs. EUR -0.7 million).

• Cash flow from operations was negative EUR 0.8 million, reflecting seasonal weakness but improved from prior year.

• Deferred revenues stood at EUR 11.3 million at quarter-end, affected by invoicing timing.

• H1 2024 net sales reached EUR 10.1 million, up 5.0% year-over-year; EBITDA was EUR 0.7 million.

• Recurring revenue (ARR) grew 3.7% to EUR 19.0 million; subscription ARR up 8.2% to EUR 11.7 million.

Outlook and guidance

• Net sales expected to grow in 2024 compared to 2023, with positive EBITDA and operating cash flow anticipated.

• Full impact of recent cost reductions expected in Q4 2024.

• Full-year recurring and subscription revenue expected to continue increasing.