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ER - WithSecure Half-year report 1 January - 30 June 2025: Elements software revenue growth offset by managed services decline; new products advancing proactive threat management to a new level

Company: WithSecure Oyj Date: 2025-07-16 Language: English Register to download
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 WithSecure Half-year report 1 January - 30 June 2025: Elements software revenue growth offset by managed services decline; new products advancing proactive threat management to a new level

# WithSecure Half-year report 1 January - 30 June 2025: Elements software revenue growth offset by managed services decline; new products advancing proactive threat management to a new level

WithSecure Corporation | Half-year report Q2 2025 | 16 July 2025 at 08:00 EEST

**Highlights of April – June 2025 (“second quarter”)**

-   Annual Recurring Revenue (ARR)1 for Elements Cloud products and services increased by 3% to EUR 84.9 million (EUR 82.5 million)
-   Elements Cloud ARR decrease from previous quarter was 2%
-   Net Revenue Retention (NRR) for Elements Cloud was 99%
-   Revenue for Elements Cloud increased by 5% to EUR 21.5 million (EUR 20.5 million)
-   Adjusted EBITDA for Elements Company was EUR 0.2 million (EUR -0.8 million, restated)
-   ARR for Cloud Protection for Salesforce increased by 54% to EUR 14.0 million (EUR 9.1 million)
-   Net Revenue Retention (NRR) for CPSF was 122%
-   Operative cash flow of the second quarter was EUR 2.3 million (EUR -2.6 million)
-   Items affecting comparability (IAC) of adjusted EBITDA were EUR -2.3 million (EUR -0.5 million)

1 *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*

**Highlights of January – June 2025 (“first half”)**

-   Revenue for Elements Cloud products and services increased by 5% to EUR 43.4 million (EUR 41.1 million)
-   CPSF revenue increased by 61% to EUR 6.8 million (EUR 4.2 million)
-   Adjusted EBITDA for Elements Company was EUR 1.1 million (EUR -0.1 million)

**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.

Medium-term financial target (for Elements Company segment)  

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**

In the second quarter of 2025, discussions around digital sovereignty accelerated across Europe, highlighting the need for trusted European cybersecurity technology vendors. WithSecure is responding by expanding scope with existing partners and by forming new partnerships strengthening our role as a reliable partner in building and sustaining digital trust.

In the second quarter, WithSecure Elements Cloud software and Co-security services continued a solid ARR growth of 13% year-on-year. The growth is increasingly driven by the wider portfolio launched last year, especially Exposure Management and Elements MDR (Managed Detection and Response). Managed Services for larger enterprise customers have experienced customer churn during the past 24 months and in the second quarter of 2025, a large customer in the UK partially churned. Combined with earlier churn cases, the Managed Services ARR declined by 22% from the previous year. Despite this churn, the number of our Managed Services customers is growing. Consequently, WithSecure Cloud ARR grew by 3% of the previous year and was EUR 84.9 million (EUR 82.5 million).

Elements Cloud revenue grew by 5% to EUR 21.5 million (EUR 20.5 million). Revenue for On-premise products continued to decline as expected, due to both customer migrations to Elements Cloud and churn.

In June 2025, we announced a breakthrough in zero-day vulnerability detection, resulting from the use of Endpoint Detection and Response (EDR) behavioral data for Exposure Management purposes. This represents a significant advancement in proactive threat discovery and vulnerability management and enhances EDR capabilities further in proactive threat management.

In May 2025, we held our SPHERE25 event in Helsinki. It provided an excellent opportunity to meet our key partners and customers, and to introduce the latest additions to our Elements Cloud portfolio. **Elements Exposure Management 2.0** brings extended cloud visibility and a deeper analysis of identity exposures, as well as new tools for the partners for managing their customers. **Elements XDR Cloud Security** is a powerful solution designed to help mid-sized organizations detect and investigate cyber threats in their Microsoft Azure cloud environments. WithSecure **Elements Infinite** will bring full proactive 24/7 managed expert services to Elements Cloud, providing a combination of services and product to a holistic approach to cyber security. With these additions to the product portfolio, we are progressing towards the vision of a truly unified experience. Proactive and reactive security is becoming increasingly unified - for efficiency, effectiveness and simplicity.

During the summer of 2025, we will continue meeting with partners and customers at local SPHERE2YOU events, held in our main market areas. We are especially delighted to welcome many new partners to collaborate with us in providing their mid-market customers with a reliable and flexible cyber security toolkit.

Adjusted EBITDA of the Elements Company segment was EUR 0.2 million (EUR -0.8 million). The profitability was impacted by higher marketing expenses than in other quarters. In the beginning of July, we announced change negotiations to reorganize the partner- and customer-facing activities, to be in line with the current strategy. Another objective is to align the cost structure with the reduced level of Managed services business, especially in the UK. As part of the planned changes, we expect to reach approximately EUR 6.5 million in annual savings.

Cloud Protection for Salesforce ARR grew by 54% of the previous year and was EUR 14 million (EUR 9.1 million). New customer acquisition and expansions to existing customers continued but the development was partially offset by the impact of exchange rates.

In June 2025, we closed the divestment of the cyber security consulting business, now rebranded as Reversec. We would like to wish our former colleagues all the best in providing offensive-driven security expertise to their customers around the world.

We also closed the divestment of our Malaysian entity in the second quarter. The buyer becomes a preferred distributor in the region, which is expected to accelerate growth of the Elements products and services in the Asian markets. After a transition period, WithSecure’s products and services will be fully developed and delivered from Europe.

**Financial performance - WithSecure Group**

|     |     |     |     |     |     |     |     |
| --- | --- | --- | --- | --- | --- | --- | --- |
| **(mEUR)** | **4-6/2025** | **4-6/2024** | **Change %** | **1-6/2025** | **1-6/2024** | **Change %** | **1-12/2024** |
| **Continuing operations** |     |     |     |     |     |     |     |
| **Revenue** | **29.4** | **28.6** | **3%** | **59.5** | **57.5** | **4%** | **116.0** |
| Cost of revenue | \-5.5 | \-5.9 | \-6% | \-11.3 | \-11.8 | \-5% | \-23.4 |
| Gross Margin | 23.8 | 22.8 | 5%  | 48.2 | 45.7 | 6%  | 92.6 |
| *% of revenue* | 81.2 % | 79.5 % |     | 81.1 % | 79.5 % |     | 79.8 % |
| Other income for adjusted EBITDA1 | 0.2 | 0.5 | \-66% | 0.2 | 0.9 | \-74% | 2.0 |
| Operating expenses for adjusted EBITDA1 | \-23.8 | \-24.4 | \-2% | \-46.9 | \-47.5 | \-1% | \-92.6 |
| Sales & Marketing | \-12.9 | \-12.8 | 1%  | \-25.0 | \-24.1 | 4%  | \-47.9 |
| Research & Development | \-8.1 | \-8.9 | \-10% | \-16.4 | \-18.1 | \-9% | \-35.0 |
| Administration | \-2.8 | \-2.6 | \-9% | \-5.5 | \-5.3 | 4%  | \-9.7 |
| **Adjusted EBITDA****1** | **0.2** | **\-1.1** | **115%** | **1.5** | **\-0.9** | **260%** | **2.0** |
| *% of revenue* | 0.6 % | \-4.0 % |     | 2.6 % | \-1.7 % |     | 1.7 % |
| Items affecting comparability (IAC) |     |     |     |     |     |     |     |
| Other items | 0.0 | \-0.3 | \-100% | 0.0 | \-1.0 | \-100% | \-1.0 |
| Divestments | \-0.6 | 0.3 | 346% | \-0.7 | 0.6 | 222% | 1.2 |
| Restructuring | \-1.7 | \-0.5 | 255% | \-1.9 | 0.0 |     | \-1.1 |
| **EBITDA** | **\-2.2** | **\-1.7** | **\-30%** | **\-1.0** | **\-1.4** | **29%** | **1.1** |
| *% of revenue* | \-7.4 % | \-5.9 % |     | \-1.7 % | \-2.5 % |     | 1.0 % |
| Depreciation & amortization, excluding PPA | \-1.9 | \-2.2 | \-15% | \-4.0 | \-4.5 | \-9% | \-9.0 |
| PPA amortization2 | \-0.5 | \-0.6 | \-19% | \-1.0 | \-1.2 | \-18% | \-2.2 |
| **EBIT** | **\-4.6** | **\-4.5** | **\-1%** | **\-6.1** | **\-7.1** | **15%** | **\-10.1** |
| *% of revenue* | \-15.6 % | \-15.9 % |     | \-10.2 % | \-12.4 % |     | \-8.7 % |
| **Adjusted EBIT****1** | **\-1.7** | **\-3.4** | **49%** | **\-2.5** | **\-5.4** | **53%** | **\-7.0** |
| *% of revenue* | \-5.9 % | \-11.8 % |     | \-4.2 % | \-9.4 % |     | \-6.0 % |
|     |     |     |     |     |     |     |     |
| **Discontinued operations** |     |     |     |     |     |     |     |
| **Revenue** | **4.0** | **8.2** | **\-52%** | **10.4** | **15.6** | **\-33%** | **31.4** |
| **Adjusted EBITDA****1** | **\-1.5** | **0.0** |     | **\-3.1** | **\-0.2** |     | **1.1** |
| *% of revenue* | \-37.6 % | 0.1 % |     | \-29.4 % | \-1.2 % |     | 3.6 % |
| Items affecting comparability (IAC) |     |     |     |     |     |     |     |
| Divestments | 0.9 |     |     | 0.4 |     |     | 1.1 |
| **EBIT** | **\-0.7** | **\-0.2** | **\-317%** | **\-3.0** | **\-0.5** | **\-474%** | **\-29.3** |
| *% of revenue* | \-17.7 % | \-2.1 % |     | \-29.1 % | \-3.4 % |     | \-93.6 % |
|     |     |     |     |     |     |     |     |
| **Combined operations** |     |     |     |     |     |     |     |
| **Revenue** | **33.3** | **36.8** | **\-9%** | **69.9** | **73.1** | **\-4%** | **147.4** |
| **Adjusted EBITDA****1** | **\-1.3** | **\-1.1** | **\-16%** | **\-1.5** | **\-1.1** | **\-37%** | **3.1** |
| *% of revenue* | \-3.9 % | \-3.1 % |     | \-2.2 % | \-1.5 % |     | 2.1 % |
| Earnings per share, (EUR)3 | \-0.03 | \-0.02 | \-43% | \-0.05 | \-0.03 | \-52% | \-0.22 |
| Deferred revenue | 62.4 | 67.7 | \-8% | 62.4 | 67.7 | \-8% | 67.7 |
| Cash flow from operations before financial items and taxes | 2.3 | \-2.6 | 187% | \-0.3 | \-5.1 | 94% | 2.1 |
| Cash and cash equivalents | 29.5 | 25.7 | 15% | 29.5 | 25.7 | 15% | 27.3 |
| ROI, % | \-3.9 % | \-3.1 % |     | \-4.8 % | \-4.5 % |     | \-9.3 % |
| Equity ratio, % | 62.1 % | 75.6 % |     | 62.1 % | 75.6 % |     | 59.1 % |
| Gearing, % | \-11.5 % | \-12.4 % |     | \-11.5 % | \-12.4 % |     | 0.4 % |
| Personnel, end of period | 654 | 993 | \-34% |     |     |     | 961 |

1.  *Adjustments are material items outside the normal course of business associated with acquisitions, 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)*
2.  *Amortization of intangible assets from business combinations (PPA, purchase price allocation, related amortizations).*
3.  *Based on the weighted average number of outstanding shares during the period 175,768,316 (1-6/2025).*

**Events after period-end**  

On 4 July 2025, WithSecure announced that it will start change negotiations to reorganize partner- and customer-facing activities and to align the cost structure with the new level of Managed services business, especially in the UK. The company estimates that through the planned changes, it could achieve annual cost savings of approximately EUR 6.5 million. Negotiations are expected to be carried out within regulatory timeframes of the countries involved.

**Additional information**  

This is a summary of WithSecure’s Half-year Report 1 January – 30 June 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 16 July starting at 14.00 EEST. The webcast will be held in English and can be accessed at

[https://withsecure.events.inderes.com/q2-2025/register](https://withsecure.events.inderes.com/q2-2025/register)

Questions in written format are requested in the webcast portal. Presentation material and the webcast recording will be available on the company website

[Publications | Investor Relations | WithSecure™](https://www.withsecure.com/en/about-us/investor-relations/publications)

**Financial calendar**  

During the year 2025, WithSecure Corporation will publish financial information as follows:

-   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

Laura Viita  

VP, Controlling, investor relations and sustainability  

WithSecure Corporation  

+358 50 487 1044  

[investor-relations@withsecure.com](mailto:investor-relations@withsecure.com)