WithSecure (WITH) Q1 2025 earnings summary

Executive summary

• Cloud Protection for Salesforce (CPSF) ARR grew 70% year-over-year to EUR 13.9 million, with approximately 290 customers at quarter end.

• Elements Cloud ARR increased 8% to EUR 86.6 million, with revenue up 6% to EUR 21.9 million.

• Divestment of the Malaysian entity and consulting business is progressing, with closure expected in Q2 2025, supporting a shift to a fully European, subscription-based company.

• New strategic distributor partnerships and consolidation of smaller partners under key distributors in Asia-Pacific, UK, France, Austria, and the Netherlands.

• Geopolitical tensions and digital sovereignty concerns are driving demand for European cybersecurity solutions.

Financial highlights

• Q1 2025 revenue from continuing operations grew 4% year-over-year to EUR 30.1 million; gross margin improved to 81.0%.

• Adjusted EBITDA for continuing operations was EUR 1.3 million (4.5% of revenue), up from EUR 0.2 million in Q1 2024.

• Elements Cloud NRR was 103%; CPSF NRR was 133%.

• Managed services ARR declined 8%, mainly due to large customer churn, especially in the UK.

• On-premise revenue declined as expected, with some churn and transition to cloud.

Outlook and guidance

• Elements Cloud ARR expected to grow 10–20% in 2025 from EUR 83.3 million at end-2024; CPSF ARR expected to grow 20–35% in 2025 from EUR 12.8 million at end-2024.

• Adjusted EBITDA for Elements Company segment guided at 3–7% of revenue for 2025.

• Medium-term target to achieve a rule of 30+ (revenue growth + EBITDA %) by 2027.