WithSecure (WITH) Q3 2024 earnings summary

Executive summary

• Elements Cloud ARR grew 11% year-over-year to EUR 81.8 million, with revenue up 9% to EUR 20.7 million and NRR at 104%; profitability improved at the adjusted EBITDA level.

• Cloud Protection for Salesforce ARR surged 38% year-over-year to over EUR 10 million, with revenue up 20% to EUR 2.4 million and NRR at 108%.

• Group revenue increased 4% year-over-year to EUR 36.1 million in Q3 2024, with adjusted EBITDA of EUR 1.9–2.0 million.

• Cyber security consulting revenue declined 1% year-over-year, with break-even adjusted EBITDA and a EUR 15.5 million goodwill impairment; business remains under strategic review.

• Notable product launches included exposure management and a generative AI assistant for Elements customers; improved position in the Gartner Magic Quadrant.

Financial highlights

• Q3 2024 group revenue was EUR 36.1 million, up 4% year-over-year; gross margin improved to 72.6%.

• Adjusted EBITDA for Q3 was EUR 1.9 million (up from EUR -2.3 million year-over-year); for the nine months, EUR 0.7 million (up from EUR -16.3 million).

• Group EBIT for Q3 was EUR -17.2 million, impacted by a EUR 15.5 million goodwill impairment.

• Operating expenses reduced by EUR 1.6 million year-over-year, with total opex reduction of EUR 3.1 million.

• Cash and cash equivalents at period end were EUR 21.6 million, down 28% year-over-year.

Outlook and guidance

• Elements Cloud ARR expected to grow 6–14% in 2024 from EUR 78.4 million at end-2023; revenue to grow 8–12%.

• Group total revenue forecasted to increase 2–5% from EUR 142.8 million in 2023.

• Adjusted EBITDA for full year 2024 expected to be positive.

• Q4 expected to be seasonally strong, with confidence in pipeline and historical trends.