Nixu Corporation: CEO’s review for Q3 2020
Nixu Corporation’s unaudited revenue for July–September 2020 increased organically by 3.6% from the corresponding period of the previous year and amounted to EUR 11.1 million (Q3/2019: EUR 10.7 million). EBITDA amounted to EUR 1,016 thousand (Q3/2019: EUR –599 thousand).
Nixu Corporation revenue 1-9/2020 is EUR 38.7 million and EBITDA EUR 1,076 thousand. (1-9/2019: revenue EUR 36.4 million and EBITDA 1,376 thousand).
In March 2020, Nixu withdrew its financial guidance due to the exceptional uncertainty caused by the COVID-19 pandemic. In May, Nixu announced that its short-term focus would be on maintaining its operating conditions rather than seeking strong growth.
Nixu sees the COVID-19 pandemic as an accelerator for the strong digitalization of society. As a result of the pandemic, many companies have removed obstacles in the path of digitalization, and there seems to be no return to the former status quo. This development requires great attention to cybersecurity as well as investments to ensure the continuity of digital business operations.
Although the uncertainty in the market continues, Nixu will provide guidance for 2020 based on its current estimate. In addition, Nixu has today published corrected financial figures related to changed revenue recognition from the first half year. These accounting changes do not change the monetary value of the contracts over time and they don’t affect cashflow.
Financial guidance for 2020:
The uncertainty caused by the COVID-19 pandemic continues in the market. However, the company estimates that its revenue will grow and EBITDA will improve from the previous year. In financial year 2019 revenue was EUR 51.2 million and EBITDA EUR 1.0 million.
CEO Petri Kairinen:
The COVID-19 pandemic has demonstrated the necessity of the digital society. Keeping the digital society running continues to be one of the most important duties of cybersecurity efforts. The pandemic has forced companies as well as other actors in society to implement new digital solutions at a fast pace. Some of these solutions now hastily deployed may not be able to withstand cyberattacks or otherwise provide sufficient resilience in a rapidly changing environment. Therefore, we believe that there is an even stronger demand for cybersecurity services and we are very confident about the longer term demand outlook for cybersecurity.
In the short term, the post-summer period has been characterized by caution in clients’ purchasing behavior. Although life largely returned to normal in our operating markets during the summer, companies’ financial uncertainty has continued to cause caution and price pressure in purchasing. In the spring, we estimated that the third quarter would be the most financially challenging period, as sales work was difficult before the summer and we estimated projects to take off slowly after the summer. To our delight, however, our revenue for the past few months has exceeded our own conservative estimates.
We have this year prioritized profitability at the expense of growth. However we have managed to maintain our market position reasonably well. Our profitability also improved considerably during July-September 2020. The cost-savings program launched in the spring has played a major role in improving our profitability. Through the program we reduced fixed costs and sought one-time savings through temporary layoffs and other measures. We have also continued the work that we started at the turn of the year to improve our overall operational efficiency and enhance forecasting.
Customer work and responding to clients’ changing cybersecurity needs is naturally more important for our business than ever during this unusual time. The number of new orders in the third quarter significantly exceeded the figures in the corresponding period last year. This gives our business a solid basis towards the end of the year. For the time being, however, we will continue to focus on profitability before strong growth. At the same time, we will continue to work to improve Nixu's service portfolio and delivery capability so that we can return to strong growth as the market situation becomes clearer.
Nixu Corporation
Further information:
CEO Petri Kairinen, Nixu Corporation
Telephone: +358 40 832 1832, e-mail: petri.kairinen@nixu.com
Distribution:
Nasdaq Helsinki
Main media
www.nixu.com
Nixu in Brief:
Nixu is a cybersecurity services company on a mission to keep the digital society running. Our passion is to help organizations embrace digitalization securely. Partnering with our clients we provide practical solutions for ensuring business continuity, an easy access to digital services and data protection. We aim to provide the best workplace to our team of over 400 cybersecurity professionals with a hands-on attitude. With Nordic roots we serve enterprise clients worldwide. Nixu shares are listed on the Nasdaq Helsinki stock exchange.
www.nixu.com