WISeKey Announces First Half 2023 Financial Results
WISeKey Announces First Half 2023 Financial Results
Reports 39% Increase in Revenue and 69% Increase in Gross Profit
Conference Call Scheduled for Monday, October 2 at 12:00 pm ET (6:00 pm CET)
GENEVA – September 29, 2023 – Ad-Hoc announcement pursuant to Art. 53 of SIX Listing Rules– WISeKey International Holding Ltd. (“WISeKey”) (SIX: WIHN, NASDAQ: WKEY), a leader in cybersecurity, digital identity, and Internet of Things (IoT) solutions operating as a holding company, today announced its first half 2023 (H1 2023) financial results.
Outlook for the full year 2023 and beyond
The Group has taken several initiatives to continue growing revenue and strengthen net results. These initiatives include:
However, management expects 2024 to be a transition year where the focus of customer demand will shift to the next generation of semiconductor products, which is likely to impair WISeKey’s growth temporarily in 2024 before full production of the next generation semiconductor products starts in 2025/2026.
WISeKey, a prominent holding company, proudly operates through its four distinctive subsidiaries: SEALSQ Corp, WISeKey SA, WISeSat.Space, and WISe.ART. Each entity uniquely complements the vast technological portfolio of the parent company, playing a pivotal role in different technology sectors. Amidst this expansive structure, WISeKey has recently reported a promising pipeline in new opportunities for IoT semiconductors products.
Entering the NFT market allows WISeKey to diversify its revenue streams and broaden its client base to include artists, collectors, and investors. WISe.ART can monetize its platform through transaction fees, authentication and verification services, and premium subscriptions.
WISeKey’s foray into the NFT market can bolster its brand as a leader in innovative digital solutions. This could enhance its appeal across other business sectors, potentially attracting more clients and driving higher revenue. Additionally, WISe.ART could act as a gateway for users to explore WISeKey’s other offerings, leading to greater adoption of its cybersecurity solutions and contributing further to its revenue diversification.
The company will host a conference call to review its results on Monday, October 2, at 12:00 pm ET (6:00 pm CET). If you wish to join the conference call, please use the dial-in information below:
A simultaneous webcast of the call may be accessed online via the Investor Relations section of the company’s website, https://www.wisekey.com/company/investors/.
The archived call will also be available on the Investor Relations section of the company’s website.
Management Discussion & Analysis of Financial Condition and Results of Operations
Key Financial Metrics
* See reconciliation to GAAP below
This 39% increase in revenue is mostly attributable to our semiconductors vertical under SEALSQ Corp. with revenue for H1 2023 of $14.8 million, compared to $10.7 million in H1 2022, due to the higher demand for semiconductors following the shortages in the industry triggered by the Covid pandemic over the last few years. However, now that the semiconductor supply chain is back to normal, we anticipate that the semiconductor industry will become more competitive.
We anticipate that the revenue increase rate over the full year 2023 will remain strong, over 20%, albeit not reaching the level of H1 2023. Our customers are initiating their transition towards our new product generation which shall bring them to tighten controls over their inventory and order processing.
Revenue by region
Our revenue by geographic region for the six month-period ended June 30, 2023 and 2022 is set forth in the following table:
Strong demand for our IoT products in 2023
SEALSQ’s R&D investment in post-quantum resistant technology is also expected to generate new revenue from next generation semiconductors starting in 2025/2026.
However, with the semiconductor supply chain back to full capacity, we expect that competitiveness will increase and our gross margin will stabilize to pre-Covid levels as semiconductor customers will no longer be willing to pay a premium to secure their order and circumvent any shortages.
Net results have switched from a net income of $0.8 million in H1 2022 to a net loss of $7.1 million in H1 2023 mainly due to the $11.8 million gain on disposal of arago GmbH disclosed for the six months ended June 30, 2022. However, the receivable for the sale of arago GmbH was fully written off as at December 31, 2022, which transformed the $11.8 gain on disposal as at June 30, 2022 into a $15 million loss on disposal as at December 31, 2022. Taking into account that write-off for the sale of arago GmbH, the net loss of $7.1 million in H1 2023 compares well to a net loss of $26.1 million in H1 2022, including $4.4 million generated by arago GmbH. With the sale of this company, WISeKey has significantly reduced its cash burn rate and fixed costs.
Liquidity and Capital Resources
Consolidated Income Statement of WISeKey International Holding Ltd
Non-GAAP Financial Measures
These non-GAAP financial measures are provided in addition to, and not as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. The presentation of these and other similar items in non-GAAP financial results should not be interpreted as implying that these items are non-recurring, infrequent, or unusual. Reconciliations of these non-GAAP measures to the most comparable measures calculated in accordance with GAAP are provided in the financial statements portion of this release in a schedule entitled “Financial Reconciliation of GAAP to non-GAAP Results (unaudited).”
Non-GAAP to GAAP Reconciliations - WISeKey International Holding Ltd
Each subsidiary contributes to WISeKey’s mission of securing the internet while focusing on their respective areas of research and expertise. Their technologies seamlessly integrate into the comprehensive WISeKey platform. WISeKey secures digital identity ecosystems for individuals and objects using Blockchain, AI, and IoT technologies. With over 1.6 billion microchips deployed across various IoT sectors, WISeKey plays a vital role in securing the Internet of Everything. The company’s semiconductors generate valuable Big Data that, when analyzed with AI, enable predictive equipment failure prevention. Trusted by the OISTE/WISeKey cryptographic Root of Trust, WISeKey provides secure authentication and identification for IoT, Blockchain, and AI applications. The WISeKey Root of Trust ensures the integrity of online transactions between objects and people. For more information on WISeKey’s strategic direction and its subsidiary companies, please visit www.wisekey.com.
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