WithSecure Corporation Announces Outlook Adjustment for 2024
WithSecure Corporation has made an important update regarding its financial expectations for 2024. This adjustment concerns their Elements Cloud products and services, as well as total group revenue projections.
Revised Expectations for Elements Cloud Revenue
For 2024, the company anticipates its Annual Recurring Revenue (ARR) for Elements Cloud products and services will see growth in the range of 6 to 14 percent, a revision from the earlier forecast of 10 to 20 percent. As of the end of the previous year, the Elements Cloud ARR stood at EUR 78.4 million.
Projected Revenue Growth for Elements Cloud
The revenue generated from Elements Cloud products and services is now expected to increase by 8 to 12 percent compared to the previous year, down from the former estimate of 10 to 16 percent. The revenue for the past year from these solutions reached EUR 76.1 million, demonstrating the strong base from which the company is building its future growth.
Total Group Revenue Outlook
Additionally, the total group revenue is now projected to grow by 2 to 5 percent from what was recorded in the preceding year. Previously, expectations had set the growth rate between 6 to 12 percent. The group’s revenue last year totaled EUR 142.8 million. This cautious outlook reflects ongoing market dynamics and customer behaviors.
Maintaining Positive Adjusted EBITDA
Despite the downward revision in revenue expectations, WithSecure is maintaining its outlook for adjusted EBITDA, which is expected to remain positive for the year. This indicates a stable operational performance amid the adjustments in revenue growth forecasts.
Reasons Behind the Adjusted Outlook
The rationale for revising the revenue outlook stems from a mix of performance feedback from various regions. Growth has persisted in key European markets; however, growth within the DACH area has experienced a slowdown during the third quarter of the year. Furthermore, the revenue momentum in markets outside the European Union and Japan, particularly in the United Kingdom and the United States, fell short of earlier expectations.
Impact of Customer Churn and Performance Targets
Elements Cloud’s ARR and revenue figures have been adversely affected by unexpected churn rates among some key customers in the Managed Services division, which have not been adequately offset by the acquisition of new business. Moreover, the performance targets set for the cybersecurity consulting sector have not been fully achieved during the first and third quarters of 2024, contributing to the revision of revenue expectations.
Comparative Insight into Previous Outlook
Previously, the ARR for Elements Cloud was forecasted to grow between 10 to 20 percent, with revenue growth expectations set at 10 to 16 percent as well. Such optimistic outlooks have been moderated to reconcile with the present market observations and performance outcomes.
Contacting WithSecure Corporation for Investor Relations
For those seeking more information about WithSecure Corporation, Laura Viita serves as the Vice President of Controlling, Investor Relations, and Sustainability. She can be contacted at +358 50 487 1044 or via email at investor-relations@withsecure.com.
Frequently Asked Questions
What is WithSecure Corporation's new revenue outlook for 2024?
WithSecure Corporation has lowered its growth forecast for Elements Cloud products to an ARR increase of 6–14% and overall group revenue growth of 2–5%.
What factors led to the modification of the revenue forecast?
The revision was due to slow growth in the DACH region and disappointing revenue growth outside the EU and Japan, particularly in the UK and US.
How much did the Elements Cloud ARR stand at the end of 2023?
The Elements Cloud ARR at the end of 2023 was EUR 78.4 million.
What is the expected Adjusted EBITDA for WithSecure in 2024?
The expected Adjusted EBITDA for the full year 2024 is anticipated to be positive.
Who can be contacted for investor relations at WithSecure?
Laura Viita is the primary contact for investor relations and can be reached at +358 50 487 1044.
