WithSecure (WITH) Q2 2024 earnings summary

Executive summary

• Q2 2024 saw 6% revenue growth to €36.8 million, with strong ARR gains in Elements Cloud and improved consulting performance; major product launches included Exposure Management, Identity Security, Managed Detection and Response, and the Luminen AI assistant, all receiving positive feedback and first customer agreements in June.

• CEO Antti Koskela was officially appointed, expressing optimism for growth, especially in the mid-market segment, following legal proceedings involving the former CEO.

• Strategic divestment agreement for a non-core business was signed, with closing expected in H2 2024.

Financial highlights

• Group revenue increased 6% year-over-year to €36.8 million in Q2 2024; H1 revenue up 4% to €73.1 million.

• Elements Cloud ARR grew 13% year-over-year to €82.5 million; revenue up 10% to €20.5 million in Q2.

• Gross margin improved to 71.9% from 68.9% year-over-year; H1 gross margin at 71.4%.

• Adjusted EBITDA loss narrowed to €-1.1 million from €-7.9 million year-over-year, mainly due to Sphere event costs and one-time payroll impacts.

• Operating expenses reduced by €3.9 million year-over-year, with total opex reduction of €5.7 million including discontinued TSA costs.

Outlook and guidance

• ARR for Elements Cloud expected to grow 10–20% in 2024 from €78.4 million at end-2023; Elements Cloud revenue projected to grow 10–16%; group total revenue guidance is 6–12%.

• Full-year adjusted EBITDA and EBIT are expected to be positive.

• Positive sentiment and pipeline post-Sphere support optimism for H2 growth.