WithSecure Corporation, Interim Report 1 January – 31 March 2025, 25 April 2025 at 8.00 EEST
WithSecure Interim Report 1 January – 31 March 2025: Elements ARR growth continued, 70% ARR growth for Cloud Protection for Salesforce
Highlights of January – March 2025 (“first quarter”)
- Annual Recurring Revenue (ARR)1 for Elements Cloud products and services increased by 8% to EUR 86.6 million (EUR 80.5 million)
- Elements Cloud ARR increase from previous quarter was 4%
- Net Revenue Retention (NRR) for Elements Cloud was 103%
- Revenue for Elements Cloud increased by 6% to EUR 21.9 million (EUR 20.6 million)
- Adjusted EBITDA for Elements Company was EUR 0.9 million (EUR 0.7 million, restated)
- ARR for Cloud Protection for Salesforce increased by 70% to EUR 13.9 million (EUR 8.2 million)
- Net Revenue Retention (NRR) for CPSF was 133%
- Operative cash flow of the first quarter was EUR -2.6 million (EUR -2.4 million)
- Items affecting comparability (IAC) of adjusted EBITDA were EUR -0.2 million (EUR +0.1 million).
- Annual recurring revenue (ARR) of cloud products is calculated by multiplying monthly recurring revenue of last month of quarter by twelve. Monthly recurring revenue includes recognized revenue within the month excluding non-recurring revenue and adjustments for one-off items
Outlook for 2025 (unchanged)
Annual Recurring Revenue (ARR) for Elements Cloud products and services will grow by 10-20% from the end of 2024.
At the end of 2024, Elements Cloud ARR was EUR 83.3 million.
Elements Company segment’s Adjusted EBITDA will be 3-7% of revenue.
Annual Recurring Revenue (ARR) for Cloud Protection for Salesforce (CPSF) will grow by 20-35% from the end of 2024.
At the end of 2024, CPSF ARR was EUR 12.8 million.
Cyber security consulting business will be divested in 2025. Elements company and CPSF will have their own guidance going forward. Both are recurring, subscription-based businesses, which is reflected in the new guidance.
Medium-term financial target (for Elements Company segment) (unchanged)
Over the next three years (2025-2027), WithSecure will become a “Rule of 30+” company.
The components of the target are
- Annual revenue growth as percentage
- Adjusted EBITDA as percentage of revenue
WithSecure is targeting to reach a sum of the components that exceeds 30.
Figures in this release are unaudited. Figures in brackets refer to the corresponding period in the previous year, unless otherwise stated. Percentages and figures presented may include rounding differences and might therefore not add up precisely to the totals presented.
CEO Antti Koskela
First quarter of 2025 was marked by many unusual events impacting the world politics and economy. Despite the turbulence, both of WithSecure’s businesses remained on the growth track. Elements Cloud Annual Recurring Revenue (ARR) increased by 8% to EUR 86.6 million (EUR 80.5 million), and the Elements Cloud revenue grew by 6% to EUR 21.9 million (EUR 20.6 million). Cloud Protection for Salesforce, reported as a separate segment from the Elements, had a 70% ARR growth to EUR 13.9 million (EUR 8.2 million).
In a world where cyber security is not just a technical challenge but also a geopolitical one, we believe that how and where technology is built truly matters. Our strategy is to become a flagship for European cyber security, and we are positioning ourselves at the forefront of this transformation. Given the geopolitical situation, we have seen significant interest in a European alternative among our partners and customers. We signed an agreement in the beginning of the second quarter to divest our Malaysian entity to a partner, who will become WithSecure’s preferred distributor in the region. Once this transaction is complete, all WithSecure’s products and services will be developed and delivered from Europe. We continue to develop our partner channel, and signed several new key partner agreements during the first quarter.
Inside Elements Cloud, the ARR for Elements Cloud software and co-security services increased by 14% to EUR 65.7 million (EUR 57.8 million). The growth is driven by both new customers and the expansion of existing customers. Especially the new portfolio items Exposure Management and Elements MDR, launched in May 2024, have already begun to contribute to the growth. The Managed services ARR declined by 8% to EUR 20.9 million (EUR 22.7 million). The ARR decline is mostly related to customers in the UK.
Elements Company Adjusted EBITDA in the first quarter was EUR 0.9 million (EUR 0.7 million, restated figure). Operative cash flow was EUR -2.6 million (EUR -2.4 million). Cash flow was impacted by the previous year’s bonus payments, as well as the additional costs related to divestments.
Cloud Protection for Salesforce (CPSF) continued with a strong performance and achieved a 70% growth of ARR, to EUR 13.9 million (EUR 8.2 million). The growth was driven by many new enterprise customer logos, as well as smaller Salesforce users who want to protect their Salesforce Cloud from vulnerabilities caused by external content uploads. The CPSF segment became profitable for the first time, with EUR 0.4 million Adjusted EBITDA (EUR -0.4 million). We continue to develop CPSF as an independent business inside WithSecure, while keeping the strategic review options open.
The divestment of our Cyber security consulting business, announced on 23 January 2025, is progressing as planned. The carve-out process is ongoing in collaboration with the buyer, and the target to close the transaction during the second quarter of 2025 remains valid.
Financial performance – WithSecure Group
| (mEUR) | 1-3/2025 | 1-3/2024 | Change % | 1-12/2024 |
| Continuing operations | ||||
| Revenue | 30.1 | 28.8 | 4% | 116.0 |
| Cost of revenue | -5.7 | -5.9 | -3% | -23.4 |
| Gross Margin | 24.4 | 22.9 | 6% | 92.6 |
| % of revenue | 81.0 % | 79.4 % | 79.8 % | |
| Other income for adjusted EBITDA1 | 0.1 | 0.4 | -83% | 2.0 |
| Operating expenses for adjusted EBITDA1 | -23.1 | -23.2 | 0% | -92.6 |
| Sales & Marketing | -11.8 | -11.3 | 4% | -47.9 |
| Research & Development | -8.1 | -9.1 | -11% | -35.0 |
| Administration | -3.2 | -2.7 | 18% | -9.7 |
| Adjusted EBITDA1 | 1.3 | 0.2 | 618% | 2.0 |
| % of revenue | 4.5 % | 0.7 % | 1.7 % | |
| Items affecting comparability (IAC) | ||||
| Other items | 0.0 | 0.3 | -100% | -1.0 |
| Divestments | 0.0 | -0.7 | -95% | 1.2 |
| Restructuring | -0.1 | 0.4 | -130% | -1.1 |
| EBITDA | 1.2 | 0.3 | 339% | 1.1 |
| % of revenue | 3.9 % | 0.9 % | 1.0 % | |
| Depreciation & amortization, excluding PPA | -2.1 | -2.2 | -3% | -9.0 |
| PPA amortization2 | -0.5 | -0.6 | -17% | -2.2 |
| EBIT | -1.5 | -2.6 | 43% | -10.1 |
| % of revenue | -4.9 % | -8.9 % | -8.7 % | |
| Adjusted EBIT1 | -0.8 | -2.0 | 61% | -7.0 |
| % of revenue | -2.6 % | -7.0 % | -6.0 % | |
| Discontinued operations | ||||
| Revenue | 6.5 | 7.4 | -13% | 31.4 |
| Adjusted EBITDA1 | -1.6 | -0.2 | -736% | 1.1 |
| % of revenue | -24.4 % | -2.5 % | 3.6 % | |
| Items affecting comparability (IAC) | ||||
| Divestments | 0.6 | 1.1 | ||
| EBIT | -2.3 | -0.4 | -548% | -29.3 |
| % of revenue | -36.1 % | -4.9 % | -93.6 % | |
| Combined operations | ||||
| Revenue | 36.6 | 36.2 | 1% | 147.4 |
| Adjusted EBITDA1 | -0.2 | 0.0 | n/a | 3.1 |
| % of revenue | -0.6 % | 0.0 % | 2.1 % | |
| Earnings per share, (EUR)3 | -0.02 | -0.01 | -66% | -0.22 |
| Deferred revenue | 69.5 | 69.9 | -1% | 67.7 |
| Cash flow from operations before financial items and taxes | -2.6 | -2.4 | -5% | 2.1 |
| Cash and cash equivalents | 22.7 | 32.3 | -30% | 27.3 |
| ROI, % | -3.1 % | -7.1 % | -34.1 % | |
| Equity ratio, % | 60.4 % | 77.1 % | 59.1 % | |
| Gearing, % | 7.3 % | -18.9 % | 0.4 % | |
| Personnel, end of period | 964 | 996 | -3% | 961 |
- Adjustments are material items outside the normal course of business associated with acquisitions, integration, restructuring, gains or losses from sales of businesses and other items affecting comparability. For reconciliation and breakdown of adjusted costs, see Note 6 (Reconciliation of alternative performance measures)
- Amortization of intangible assets from business combinations (PPA, purchase price allocation, related amortizations).
- Based on the weighted average number of outstanding shares during the period 176,098,739 (1-3/2025).
Events after period-end
On 14 April 2025, WithSecure published its intention to divest the Malaysian entity and business operations to LS Systems Group. The transaction is expected to close during the second quarter of 2025. The responsibilities of the Malaysia site will be transitioned to WithSecure’s European locations. The transaction underscores WithSecure’s commitment to the European way in cyber security, and ensures consolidation of all WithSecure’s operations in Europe.
Additional information
This is a summary of WithSecure’s Interim Report 1 January – 31 March 2025. The full report is a PDF file attached to this stock exchange release. Full report is also available on the company website.
Webcast
WithSecure’s CEO Antti Koskela and CFO Tom Jansson will present the results in a webcast on 25 April starting at 14.00 EEST. The webcast will be held in English and can be accessed at
https://withsecure.events.inderes.com/q1-2025
Questions in written format are requested in the webcast portal. Presentation material and the webcast recording will be available on the company website
Materials | Investor Relations | WithSecure™
Financial calendar
During the year 2025, WithSecure Corporation will publish financial information as follows:
- 16 July 2025: Half-Year Report for January–June 2025
- 22 October 2025: Interim Report for January–September 2025
WithSecure observes at least a three-week (21 days) silent period prior to publication of financial reports, during which it refrains from engaging in discussions with capital market representatives or the media regarding WithSecure’s financial position or the factors affecting it.
Contact information
Tom Jansson, CFO
WithSecure Corporation
Laura Viita, VP, Controlling, investor relations and sustainability
WithSecure Corporation
+358 50 487 1044
investor-relations@withsecure.com
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