F-Secure (FSC1V) Q4 2024 earnings summary

Executive summary

• Achieved a solid end to the year with stable Q4 revenue, new Tier 1 partnerships in Asia-Pacific, and successful expansion of embedded security capabilities, including a partnership with SoftBank in Japan.

• Transformation process completed, resulting in a new operating model, cost savings, and strengthened leadership team.

• ISO 27001 certification achieved and AI-based SMS/Scam Protection won a customer experience award.

Financial highlights

• Q4 2024 revenue up 0.4% year-over-year to EUR 37.0 million; full-year revenue up 12.2% to EUR 146.3 million, mainly due to the Lookout Life acquisition.

• Direct business outperformed expectations, with ARPU growth and improved retention, while partner channel remained flat.

• Gross margin for Q4 2024 was 86.7%, but declined year-over-year due to product mix and lost synergies.

• Adjusted EBITDA for Q4 2024 was EUR 12,098 thousand, up from EUR 11,962 thousand in Q4 2023; full-year adjusted EBITDA was EUR 53,480 thousand.

• Q4 cash conversion was strong at 99.4%, with EUR 15 million loan repayment and dividend installment paid.

Outlook and guidance

• 2025 is a ramp-up year, with mid-single-digit revenue growth expected, accelerating as new partnerships ramp up.

• Adjusted EBITA for 2025 expected to be approximately at 2024 level (EUR 52.2 million), with gross margin anticipated to be slightly lower due to embedded solutions.

• Direct business revenue expected to decline as paid customer acquisition is reduced, with focus on retention and organic growth.

• Scam Protection revenue expected to become relevant in 2025, potentially increasing ARPU by 10–20%.

• Capital expenditure to remain similar to 2024, with possible increases for new product development.