WALLIX – Results for the first half of 2024: success of the subscription model and solid levers to aim for profitability – 10/10/2024 – 6:30 p.m.

• Successful transition to the subscription model: monthly recurring revenues up +30.2% and 71.6% of revenue from recurring revenues;
• Half-year turnover of €15.1 million, up +8.7%;
• Stability of operating income and net income and continued improvement in the operating expenses/turnover ratio;
• Solid growth levers making it possible to confirm the hyper growth objectives of recurring revenues over the entire 2024 financial year and to aim for a positive operating result from the second half of the year.

Paris, October 10, 2024 – WALLIX (Euronext ALLIX), European publisher of cybersecurity software, expert in identity and access management (IAM) and privileged account governance (PAM), announces its results for 1^is semester 2024[1].

Jean-Noël de Galzain, Chairman and CEO of WALLIX Group, declares: « With new hyper growth in our recurring revenues (ARR) and a new record half-year for our sales, the value of WALLIX continues to grow with now nearly 72% in recurring revenues, offering exceptional visibility over the years to come. Most of the investments necessary to transform our economic model and reach critical size have been made, which allows us to aim for a return to profitability this second half of the year and a tangible positive result in 2025.

The first half marked a strategic acceleration in the SaaS segment with the launch of WALLIX One, our zero-trust platform developed around WALLIX PAM technology, with the aim of facilitating the migration of our customers to the model. subscription and anticipate the massification of identity and digital access management in companies. Our new marketing and sales organization, deployed around a three-tier model, is showing tangible results with a strong increase in our commercial pipeline recorded since the second quarter. At the same time, we continue to expand our strategic distribution partnerships in critical markets such as OT Security with the signing of new alliances with Telenor in particular, or the mid-market with CRIS Réseaux in France and Prianto in Germany and the United Kingdom. United.

We are starting the second half of the year with new momentum. In addition to strengthening our business model and maintaining intact customer dynamics (+22.7%), we have initiated a policy of stricter control of expenses and purchases. These choices offer us the opportunity to take full advantage of our sales growth levers, to aim for positive operational profitability from the second half of the current financial year.

Finally, WALLIX is named “Visionary” in the PAM Magic Quadrant by the analysis firm Gartner. A distinction which underlines the innovative approach of WALLIX solutions in a more demanding market where only 9 global players were selected this year (compared to 11 in 2023). WALLIX also stands out as the European representative of the segment, with a unique and remarkable positioning in OT Security, namely the cybersecurity of networks and industrial systems.

At a time when Europe is in the process of adopting the NIS2 Directive which will accelerate the demand for PAM and IAM solutions in businesses, with a leading offering and a profitable growth model, we want more than ever to position WALLIX as a leading European player in cybersecurity capable of supporting customers in the adoption of more resilient trusted digital solutions. »

Recurring revenues up more than 30% and solid business growth

Monthly recurring revenue (MRR) amounts to €1.8 million as of June 30, 2024, up +30.2% over 12 months, driven by the dynamism of small and medium-sized businesses and the gradual migration of existing customers from a licensing model to a subscription model.

On an annual basis, recurring revenues reach €22.1 million.

Consolidated turnover as of 1^is half-year 2024 amounts to €15.1 million and records an increase of +8.7% supported by significant growth in recurring revenues (subscriptions + maintenance) which reach €10.8 million (+32.2% compared to 1^is half-year 2023) and represent 71.6% of half-year turnover (compared to 58.8% in 1^is semester 2023). Due to the postponement of the signing of a certain number of licenses in the public sector in France due to an uncertain political environment, license revenues recorded a decline of 29.5% over the half-year which the Company hopes to recover by at the end of the year.

At the end of June, the Group held a portfolio of 3,099 active contracts (+22.7% year-on-year) with a retention rate of more than 95%.

Continuous improvement in the operating expenses (excluding DAP)/turnover ratio

During the 1^is half-year 2024, WALLIX continued the gradual improvement of its operating expenses ratio (before depreciation and provisions) / turnover which stands at 1.34 compared to 1.39 in 1^is half-year 2023 and 1.47 in 1^is half-year 2022. This improvement was slowed down by the consolidation of Kleverware (since May 16, 2023), which cost 0.01 points, and the cyclical decline in sales of perpetual licenses, mainly in France, which weighed for 0.12 points. . Restated for these elements, the ratio would come to 1.21 (compared to 1.28 at 1^is half-year 2023 restated for non-recurring items) as a result of the optimization of support function expenses. Investments in sales, innovation and customer satisfaction are relatively stable as a share of turnover.

Compared to 2^nd half-year 2023, operating expenses remain stable. In the end, the operating result (-€6.2 million) and the net result (-€5.6 million) were at levels close to those of 1^is semester 2023.

A solid financial foundation

As of June 30, 2024, WALLIX has a solid financial base with gross cash flow of €12.8 million, after taking into account free cash flow of -€3.8 million as of June 30, 2024.^is semester 2024.

Gross financial debts amount to €8.7 million, of which 87% are debts over 3 years old, for equity of €9.0 million.

The company therefore has the solid financial base necessary to pursue its strategy and return to profitability.

Commercial levers and operational efficiency to move towards profitability in the second half of 2024

WALLIX is today the only European player among the 9 PAM leaders (Privileged Access Management) identified by Gartner in its Magic Quadrant 2024. The Group has all the tools and a differentiating positioning to continue its growth:

• Its WALLIX One solution, recognized by Gartner among the most efficient PAM solutions and available as a SaaS offering since 1^is half-year 2024, constitutes a major asset for continuing the development of the subscription portfolio;
• With its OT.security offering, WALLIX is one of the rare players to offer solutions specifically dedicated to securing OT and industrial environments. This differentiation constitutes a real asset, particularly for Major Accounts;
• The new commercial organization, deployed on a three-tier model, has already made it possible to increase the commercial pipeline substantially since the second quarter of 2024, promising a future increase in the Group’s revenues;
• The new partnerships signed during the 1^is semester such as those with Telenor and CISCO in the OT, with CRIS and Prianto on the Mid-market or with Docaposte in the small business segment, will open up new opportunities in target markets.

These growth levers, associated with the expected catch-up in sales of deferred licenses in France in 1^is half-year, to the seasonality of sales (56% of the turnover achieved on average in the 2^nd half-year over the last 4 years), give WALLIX increased confidence in its ability to maintain hyper growth rates in its recurring revenues and generate turnover in the 2^nd half-year 2024 significantly higher than that of 1^is half-year 2024. This additional business volume, associated with the workforce stabilization and cost reduction policy recently adopted by the Group, makes it possible to aim for a positive operating result in the 2^nd semester 2024.

Next publication: Turnover of 3^th quarter 2024, November 7, 2024

ABOUT WALLIX

WALLIX is a European publisher of cybersecurity software with an international presence. Founded in 2003, WALLIX is today a world leader in the identity and access security market, recognized by the most prestigious analyst firms. Its mission is to provide an identified, simple and secure access service, to allow users to operate without risk in digital and industrial environments.

WALLIX solutions are distributed by a network of more than 300 resellers and integrators around the world and WALLIX supports more than 3,000 organizations in more than 90 countries in securing their digital transformation. OT.security by WALLIX is a brand dedicated to securing access and digital identities in industrial environments.

WALLIX affirms its digital responsibility and is committed to contributing to the construction of a trusted European digital space. WALLIX received the gold medal in 2023 for its extra-financial rating (72/100 from Ethifinance) and is significantly above the average for the technology company sector (47/100).

The company has been listed on Euronext (ALLIX) since 2015. The founders and managers as well as the investment structure TDH (Thierry Dassault Holding) are the historical reference shareholders.

www.WALLIX.com | [email protected]

CONTACTS FINANCIAL COMMUNICATION

ACTUS Finance & Communication

Investor Relations – Hélène de Watteville
01 53 67 36 33 / [email protected]

Press Relations – Déborah Schwartz
06 27 09 05 73 / [email protected]

^[1] The consolidated half-year accounts were approved by the Board of Directors on October 10, 2024. The accounts were subject to a limited review by the Statutory Auditors and the financial report will be published no later than October 31, 2024.