SSH COMMUNICATIONS SECURITY CORPORATION'S BUSINESS REVIEW JULY -
SEPTEMBER 2023 (Q3/23)
SSH COMMUNICATIONS SECURITY CORPORATION – STOCK EXCHANGE RELEASE
– OCTOBER 25, 2023, AT 09:00 A.M. EEST
Net sales increased by 12%,
EBIT positive
July–September 2023:
- Net sales totaled EUR 5.2 million
(4.6 million)
- EBITDA was EUR 1.0 million (0.4
million)
- Operating profit was EUR 0.1
million (-0.4 million)
- Profit for the period was EUR 0.0
million (-0.4 million)
- Earnings per share was EUR -0.01
(EUR -0.02)
Operating cash flow was EUR 0.8 million (EUR -0.5 million). The
equity ratio was 52.4% (47.2%). Liquid assets were EUR 2.6 million
(EUR 2.7 million).
Key Figures
|
EUR million |
7–9/2023 |
7–9/2022 |
Change % |
1–9/2023 |
1–9/2022 |
Change % |
1–12/2022 |
|
|
|
|
|
|
|
|
|
|
Net sales |
5.2 |
4.6 |
11.9 |
14.8 |
13.4 |
10.2 |
19.3 |
|
EBITDA |
1.0 |
0.4 |
151.5 |
1.3 |
1.5 |
-12.0 |
2.7 |
|
% of net sales |
19.2 |
8.6 |
124.7 |
8.7 |
10.9 |
-20.1 |
13.9 |
|
Operating profit/loss |
0.1 |
-0.4 |
130.5 |
-1.3 |
-0.9 |
-49.3 |
-0.4 |
|
% of net sales |
2.4 |
-8.7 |
127.3 |
-8.6 |
-6.3 |
-35.5 |
-2.3 |
|
Profit/loss before taxes |
0.0 |
-0.4 |
92.8 |
-1.9 |
-0.7 |
-183.2 |
-0.7 |
|
Profit/loss |
0.0 |
-0.4 |
104.0 |
-1.8 |
-0.8 |
-132.1 |
-0.6 |
|
|
|
|
|
|
|
|
|
|
Return on equity, % |
|
|
|
-17.8 |
-7.0 |
-154.3 |
-5.2 |
|
Return on investment, % |
|
|
|
-15.4 |
-4.9 |
-214.3 |
-4.7 |
|
Liquid assets |
|
|
|
2.6 |
2.7 |
-3.7 |
5.7 |
|
Gearing (%) |
|
|
|
-6.6 |
-3.8 |
-73.7 |
-27.9 |
|
Equity ratio (%) |
|
|
|
52.4 |
47.2 |
11.0 |
46.1 |
|
|
|
|
|
|
|
|
|
|
Earnings per share, EUR |
-0.01 |
-0.02 |
50.0 |
-0.07 |
-0.04 |
-75.0 |
-0.05 |
|
Shareholders' equity per share, EUR |
0.23 |
0.26 |
-11.5 |
0.23 |
0.26 |
-11.5 |
0.28 |
|
|
|
|
|
|
|
|
|
|
Recurring revenue, ARR |
|
|
|
19.4 |
17.6 |
10.2 |
18.4 |
|
Subscription revenue, ARR |
|
|
|
11.5 |
9.2 |
25.0 |
9.9 |
|
Invoicing |
4.7 |
5.9 |
-20.3 |
12.4 |
13.0 |
-4.6 |
24.2 |
|
Deferred revenue |
|
|
|
12.5 |
9.2 |
35.9 |
14.1 |
|
Current |
|
|
|
8.9 |
6.5 |
36.9 |
10.6 |
|
Non-current |
|
|
|
3.6 |
2.7 |
33.3 |
3.5 |
Consolidated net sales
|
EUR million |
7–9/2023 |
7–9/2022 |
Change % |
1–9/2023 |
1–9/2022 |
Change % |
1–12/2022 |
|
|
|
|
|
|
|
|
|
|
By segment |
|
|
|
|
|
|
|
|
AMERICAS |
1.9 |
1.8 |
9.0 |
5.6 |
5.2 |
8.3 |
7.0 |
|
APAC |
0.5 |
0.4 |
18.8 |
1.1 |
1.2 |
-9.0 |
1.5 |
|
EMEA |
2.8 |
2.4 |
13.0 |
8.1 |
7.1 |
14.7 |
10.8 |
|
Total |
5.2 |
4.6 |
12.0 |
14.8 |
13.4 |
10.2 |
19.3 |
|
|
|
|
|
|
|
|
|
|
By operation |
|
|
|
|
|
|
|
|
Subscription sales |
2.9 |
2.2 |
32.8 |
8.1 |
6.2 |
31.2 |
8.7 |
|
License sales |
0.2 |
0.2 |
-24.2 |
0.5 |
0.8 |
-38.6 |
1.9 |
|
Maintenance sales |
2.0 |
2.1 |
-4.3 |
5.9 |
6.1 |
-4.2 |
8.2 |
|
Professional services & others |
0.1 |
0.1 |
-21.1 |
0.3 |
0.3 |
1.0 |
0.4 |
|
Total |
5.2 |
4.6 |
12.0 |
14.8 |
13.4 |
10.2 |
19.3 |
SSH Communications Security provides alternative performance
measures which are not defined by IFRS standards. Alternative
performance measures should not be considered substitutes for
performance measures in accordance with the IFRS. The alternative
performance measures are:
EBITDA = Operating profit/loss + depreciation and
amortization.
Recurring Revenue, ARR: Subscription + maintenance revenue at
the end of the last month of the reported period multiplied by
12.
Subscription ARR: Subscription revenue in the last month of a
reported period multiplied by 12.
Deferred Revenue: Non-recognized revenue from invoiced
maintenance and subscription sales.
Business outlook for 2023 (unchanged)
Our business transition from license and support to a
recurring-revenue model has continued providing a more stable
revenue base. At the end of 2022, our Annual Recurring Revenue was
EUR 18.4 million (EUR 15.4 million in 2021). Our net sales grew by
21% to EUR 19.3 million in 2022. Going into 2023, we will continue
to focus on increasing the average deal size. We expect net sales
to grow during 2023 compared to 2022. We estimate EBITDA and cash
flow from operating activities to be positive for 2023.
CEO review
Valued shareholders, customers, partners, and colleagues,
We closed yet another quarter of stable growth, led by
subscription sales growth of 33%. We saw continued momentum across
our business, and several new customer wins, especially in the
manufacturing, financial, and MSP sectors.
Our net sales increased by 12% to EUR 5.2 million, owing
primarily to the recurring business. EBITDA increased to EUR 1.0
million (EUR 0.4 million). Cash flow from operations improved from
the previous quarter, being 0.8 million (EUR -0.5 million).
Recurring revenue accounted for 95% of total revenue in Q3, and
Annual Recurring Revenue (ARR) reached EUR 19.4 million, of which
EUR 11.5 million is from subscription-based revenue.
PrivX as the Core of Zero Trust Suite and the Profitable
Growth of SSH
Based on PrivX technology, the Zero Trust Suite launched in June
2023 combines our product portfolio into a single comprehensive
solution. The Suite offers state-of-the-art capabilities for
securing communications between humans, applications, systems,
sites, machines, and data centers. During Q3/23, we started
cooperation with Beyond Identity, a world-leading identity access
provider, strengthening the passwordless and keyless authentication
approach of the Suite even more. The cooperation will boost new
customer acquisition for both companies and make Suite a unique
solution in the cybersecurity market.
We also expanded the Suite to include identity verification,
redefining traditional multi-factor authentication (MFA).
Traditional MFA, such as receiving SMS security codes, is becoming
obsolete, and we expect this transformation to open even more doors
and new opportunities for us.
Tackling future needs for secure business communications
between humans
During the quarter, we launched Secure Collaboration 2024 for
secure human-to-human secure communications and interaction. We
extended SSH Zero Trust Suite to a modern, real-time, secure, and
audited (who did what when?) human-to-human communications
solution. It consists of multiple modules helping people to share
private and sensitive data in semi-interactive (email) mode and in
real-time (calls, video calls, and instant messaging) and on-demand
(sharing data) inside and across organizational and country
borders.
Upgrading the Secure Collaboration 2024 offering was essential
to be able to provide a state-of-the-art solution for our current
clients and to attract new ones, especially from financial
institutions, which face new compliance requirements and
regulations for corporate and customer communications. This will
serve the modern needs of corporate real-time communications and
collaboration for existing and new customers, in line with our land
and expand strategy.
Building thought leadership in the quantum-safe area and
secure communications
During the quarter, SSH became part of the US National Institute
of Standards and Technology (NIST) Post-Quantum Cryptography
Building Block Consortium, other members being major technology
companies. The consortium improves our opportunities to connect
with new prospective customers, especially within banks and
financial institutions that are at the forefront of implementing
quantum-safe solutions.
We have strengthened our partnerships across all market segments
and systematized upstream and downstream partnerships to create
more revenue and value for both parties. We also continued major
investments in our R&D as well as sales and marketing efforts,
growing spend by 12 % and 7% YTD, respectively.
SSH Communications Security will release its financial reporting
calendar for 2024 during Q4.
Helsinki, October 25, 2023
SSH COMMUNICATIONS SECURITY
Board of Directors
Dr. Teemu TunkeloCEO
For further information, please contact:Teemu Tunkelo, CEO, tel.
+41 79 227 8362Michael Kommonen, CFO, tel. +358 40 183
5836
Distribution:NASDAQ Helsinki Ltd.Major mediawww.SSH.com
DisclaimerThe contents of this report are
provided by SSH Communications Security and its third-party content
providers for your personal information only and do not constitute
an offer or invitation to purchase any securities nor does this
report provide any form of advice (investment, tax, legal)
amounting to investment advice nor make any recommendations
regarding particular investments or products. SSH Communications
Security does not provide investment advice or recommendations to
buy or sell its shares or the shares of others. If you are
interested in investing in SSH Communications Security, please
contact your financial adviser for further details and information.
Past performance of SSH Communications Security shares is not
indicative of future results. EXCEPT AS PROVIDED BY APPLICABLE
COMPULSORY LAW SSH COMMUNICATIONS SECURITY EXPRESSLY DISCLAIMS ALL
WARRANTIES, EXPRESSED OR IMPLIED. AS TO THE AVAILABILITY, ACCURACY,
OR RELIABILITY OF ANY OF THE CONTENT PROVIDED, OR AS TO THE FITNESS
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INFORMATION FOR ANY PURPOSE.
- SSH Communications Security Corporation Business Review
Q3-23
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