WithSecure (WITH) Q3 2025 earnings summary

Executive summary

• Annual Recurring Revenue (ARR) for Elements Cloud grew 3% year-over-year to EUR 84.1 million, but declined 1% sequentially; ARR outlook for 2025 was lowered due to large customer churn in Managed Services.

• Profitability improved significantly, with adjusted EBITDA for the third quarter at EUR 4.0 million (EUR 1.6 million restated), driven by cost savings from restructuring.

• Cloud Protection for Salesforce (CPSF) ARR surged 44% year-over-year to EUR 14.7 million, with revenue up 49% in Q3.

• A public cash tender offer by CVC and Risto Siilasmaa was announced and accepted, with Diana BidCo Oy acquiring over 93% of shares.

• Divestment of the Cyber Security Consulting business and Malaysian subsidiary completed, impacting group structure and personnel.

Financial highlights

• Q3 revenue from continuing operations declined 1% to EUR 28.5 million; nine-month revenue up 2% to EUR 88.0 million.

• Gross margin improved to 81.9% in Q3 (80.0% prior year); nine-month gross margin at 81.3%.

• Adjusted EBITDA for Q3 was EUR 4.5 million (EUR 1.5 million prior year); nine-month adjusted EBITDA at EUR 6.0 million (EUR 0.6 million prior year).

• Earnings per share (combined operations) improved to EUR -0.04 in Q3 (EUR -0.10 prior year).

• Cash and cash equivalents at period end were EUR 25.1 million, up 17% year-over-year.

Outlook and guidance

• ARR growth guidance for Elements Cloud revised down to 3-10% for 2025 (previously 10-20%).

• Adjusted EBITDA for Elements Company segment expected at 3-7% of revenue.

• CPSF ARR growth guidance maintained at 20-35% for 2025.

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