Press Release: WISeKey Reports Full Year 2022 Audited Consolidated Financial Results
WISeKey Reports Full Year 2022 Audited Consolidated Financial Results
Schedules conference call for May 2 at 3:00 pm CET (9:00 am ET)
-- Revenue growth: 35% increase in FY 2022 revenue to $23.8 million, as compared to $17.6 million in FY 2021. -- Strong gross profit margin: FY 2022 gross profit margin increased slightly to 42.4% from 42.2% in FY 2021. -- Strong cash position: cash and cash equivalents together with restricted cash remained strong at $20.7 million at December 31, 2022.
Geneva, Switzerland, April 28, 2022 -- Ad-Hoc announcement pursuant to Art. 53 of SIX Listing Rules-- WISeKey International Holding Ltd. (NASDAQ: WKEY / SIX: WIHN) ("WISeKey" or the "Company" or the "Group"), a leading cybersecurity and IoT company, announced today its audited consolidated financial results for full year (FY) 2022 (period ended December 31, 2022).
Carlos Moreira, WISeKey's Founder and CEO, noted, "In 2022 WISeKey's main focus was on the Internet of Things (IoT) and the development of its SEALSQ Semiconductors/Post Quantum offering. With SEALSQ, WISeKey aims to maximize the potential of semiconductors and list it on the NASDAQ, further expanding its reach and impact in the industry. With the increasing demand for connected devices, IoT has become a vital component of modern technology. The Company recognizes the importance of IoT and plans to channel its efforts towards developing new and advanced IoT solutions in 2023. This initiative will enable the Company to offer enhanced services to its clients and stay at the forefront of technological advancements."
Despite strong revenue growth, the Company reported losses due to:
(a) Significant investment made during the year in next-generation semiconductors and the launch of SEALSQ's listing process on the NASDAQ. SEALSQ's investment in next-generation semiconductors and AI infrastructure is part of its long-term strategy to stay at the forefront of technological innovation. The Company has made significant investments in these areas in order to develop new products and services that will meet the needs of its customers in the years to come.
(b) The net proceeds from the sale of our 51% ownership WISeKey in ARAGO for $25 million have not yet been received, impacting the Company's financial performance. WISeKey is currently assessing enforcement scenarios to turn its pledge over the arago AI IP into full ownership, allowing WISeKey to integrate the HIRO AI into the WISeKey platform.
WISeKey International Holding used the COVID transitional period in 2022 to define a new strategic direction that will see it operate as a holding company of several distinctive operational companies covering the full spectrum of WISeKey-related technologies. Currently this comprises the Root of Trust and PKI at WISeKey SA, semiconductors and Quantum technology with SEALSQ and WISeKey Semiconductors, Space technology using Picosatellites under WISeSat.Space and Trusted Blockchain NFT with WISe.ART Corp. Each of these subsidiaries contribute in meaningful ways to the overall mission of the WISeKey holding company, while also operating independently with a specific focus on their particular area of R&D and expertise and integrating their respective technologies into the WISeKey platform.
The decision to operate as a holding company of several distinctive operational companies reflects WISeKey International Holding's commitment to provide the most comprehensive and effective cybersecurity platform solutions to its customers. By diversifying its operations, the holding company is better positioned to meet the evolving needs of the cybersecurity market while maintaining a central focus on its core mission of securing the Internet.
Each subsidiary has its own revenue stream and profitability targets, enabling it to focus on its core strengths and market opportunities. Each subsidiary has its own maturity stage, with SEALSQ already in process independently listing on the NASDAQ and the other subsidiaries still on start-up mode. These subsidiaries are aligned with the overall mission of the holding company that keeps majority ownership and provides managed financial services guaranteeing a proper operation while at the same time offers cutting-edge cybersecurity solutions to its customers.
Over time, the holding company plans to gradually IPO each independent company as they reach maturity. This approach will provide each subsidiary with the flexibility to operate independently while benefiting from the resources and support of the parent company. It will also create a diversified business structure that is better positioned to succeed in the rapidly evolving cybersecurity market.
Mr. Moreira added, "Our investments in innovation, strong customer demand, and execution excellence put us in a position of strength for the future. We continue to see solid demand for our semiconductors and the next generation post-quantum chips roadmap SEALSQ and are making substantial progress in the implementation of our post-quantum algorithms in Secure Semiconductors MS6001/MS6003. During the last two years, we have made considerable advancements in developing post-quantum resistant algorithms by establishing strategic R&D partnerships with MINES Saint-Etienne Research Institute ("MINES Saint-Etienne"), aiming to help the international community find cryptography algorithms that will resist future quantum computing based cyber-attacks. SEALSQ's on-chip or cloud-based solutions are now also provisioning services with the Matter Root-of-Trust PAA (Product Attestation Authority) which will help our customers save time and money in achieving Matter security compliance."
Mr. Moreira further explained, "WISeKey continues to build momentum by addressing the security needs across blockchain. In 2022, the blockchain business achieved significant new milestones in the supply management business. The supply chain management of critical goods can now be further secured by integrating IoT devices that communicate with picosatellites launched by WISeSat with the Casper blockchain. WISeKey's security chips are being utilized to protect various types of IoT devices, including satellites and their captured images and communications from agriculture and logistics sensors. Leveraging the extensive reach of picosatellites and their ability to connect with low-energy IoT devices, this product combines it with the immutability of data and smart contracting feature of the Casper blockchain to provide unique benefits to the supply chain management industry. Now, logistics processes can be more efficient and transparent, and data on goods in transit, such as environmental conditions and geo-location, can be reliably tracked. Additionally, WISeKey semiconductors securely issue NFTs that authenticate and track objects, much like an embedded ePassport, providing a digital identity used throughout the object's lifetime. This allows objects to become "Trusted Objects" of the Internet and provide verifiable data, enabling supply chain managers to make informed decisions and prevent possible accidents or delays during transit."
Mr. Moreira continued, "Demand for WISeKey's products and services substantially increased. With a 35% increase in revenue, the Group is back on its growth path, supported by investments in R&D aiming to remain at the edge of technology, and investments focused on strengthening our sales force. We anticipate this growth continuing in 2023 with a strong backlog of orders already in place while the significant investments we made to expand our production capacity will allow us to better meet our clients' needs."
"Regarding operational costs, in 2023 we will continue to invest in research and development, following $3.9 million of investments made in 2022. WISeKey, through its Semiconductor division, is investing heavily in its QUAntum resistant Secure ARchitectureS (QUASARS) project targeting the development of its next generation Quantum Resistant chip, " concluded Mr. Moreira
WISeKey's FY22 audited consolidated financial results are available at https://www.wisekey.com/company/investors/financial-reports/.
FY 2022 Key Financial Milestones:
The key highlights of the year ended December 31, 2022 were:
-- Revenue growth: 35% increase in revenue to $23.8 million in the year
2022, compared to $17.6 million in 2021.
-- Cash position remains strong with $20.7 million cash available at
December 31, 2022.
-- Increase in semiconductors production capacity: in 2022, WISeKey
initiated a 5-year capital expenditure ("CapEx") plan to increase its
semiconductors volume by up to 80% over the next 5 years. The plan is
supported by a $2 million loan from a third-party client for the purpose
of increasing production capacity.
-- Cost structure efficiency improvements: our operating expenses decreased
by $8.1 million and by $5 million when excluding non-cash stock-based
compensation in comparison to 2021, showing our successful efforts to
streamline our cost base while still being able to grow our revenue.
-- Strong investments in Research & Development ("R&D"): we continue to
support our R&D work with $3.9 million invested during the year. In 2022:
-- we initiated our QUASARS project, a radical innovative solution
paving the way of Post Quantum Cryptography era, and
-- we launched 13 security-IoT hardened low-orbit picosatellites,
WISeSaT, for our new satellite-based secure IoT
connectivity-as-a-service, through which WISeKey provides the
satellite platform, launch, integration, ground station services
and all the security architecture and components, as part of a
turnkey SaaS solution for low-power and secure space-based IoT
connectivity, in collaboration with FOSSA Systems S.L. ("FOSSA").
-- Strengthening our Sales and Marketing ("S&M") organization: the Group has
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