Hi, everybody. Welcome to the WALLIX Annual Results Presentation. We are going to talk about WALLIX, talk about our results after 2023, and to project ourselves into this 2024 year, which is really important for the development of the company itself. Let's enter the presentation, Amaury, please.
WALLIX is a software company where we develop solutions based on Linux core and distribution from the beginning, a wall under Linux. We have chosen Linux because it gives us particular freedom into the way we innovate, and we are able to product technology. WALLIX is a software editor specialist of identity and access security, cybersecurity solutions. We are 240 people plus, based in 16 different countries where we work. We coordinate a channel of more than 300 resellers, integrators, distributors based in 90 different countries. We have today a customer base of around 3,000 of active contracts with customers based in these 90 different countries. We have achieved more than EUR 30 million revenues in 2023 with the business model, which is more and more recurring, and we are going to come back on this particular point, and we have achieved 2023 with 65% of recurring revenues.
We have a lot of different labels and awards and recognition. One was particularly interesting for us in 2023, as we have been selected as one of the 50 most promising companies, small emerging companies in France by the government, we are part from the ETIncelles program, which has been created by the government to help future industrial to develop in France and to become exporters in the future. This program is useful for the company. It allows us particularly to be well-coordinated with different administrations in France. Perhaps you are not aware about that, but being well-coordinated with the administration in France is something important.
WALLIX proposes an offering to give the capacity of a CIO or a CISO to deploy a complete portfolio of solutions to manage the identity of their users, internal users, external users, remote users. Solutions to manage the passwords, the rights of access of these internal and external users, manage the remote access, the whole secrets of the organization. We have a particular technology, which helps the company to control, to trace, and to make the IT connections auditable and repeatable. We have also added to this portfolio a governance dashboard to help our customers to drive their recertification process and their capacity to drive their compliance process. We will see how it is important today when we are going to enter into the Directive NIS2 and DORA in the coming month and years.
Our global philosophy is to simplify the life of our customers, our CISO, our CIO, and by simplifying the access to these different technologies around one platform. We will come back on that point later. It is particularly recognized by the different analysts as one of the best solution in term of return on investment in the IAM and PAM sector. Our solution has the particularity to be grounded as a WALLIX IT, as an IT solution, cybersecurity solution, but also an OT specialized, adapted solution, best of breed solution. It is a characteristic of WALLIX to have been able to package the technology with specific innovations dedicated to industrial environment, the cybersecurity into industrial environment, and the interconnection with IT networks and environments.
We have these different packages in the offer of WALLIX. Our packages are also available on the different cloud platforms of the market in different countries. Our offer has been recognized as one of the most important, as one of the leaders of the market. We are the European leader of the PAM. The company has also chosen to certify the offer historically in France with the ANSSI, which is a national cybersecurity agency. But since 18 months, we have invested in a process of certification in Germany, and we are about to gain a certification delivered by the BSI. It is important for us as the DACH region and Germany offers a great potential for IAM and PAM solutions, particularly in the industrial sectors and in the medium size organization of the Mittelstand.
We are also about to enter, after the BSI, into a certification process in Spain, which will be much more simple to obtain. We are also about to enter a certification process in China, because we have now several big organizations, big groups, asking us to be present and to be able to deliver our PAM offer in a services mode in China.
After this brief presentation, I propose you to highlight the year 2023. First, it is important to precise that we have tried to point out five important milestones realized in 2023. First, the turnovers and a new year of growth. We will come back on that point. How we are more and more developing a recurring model. How we are, I would say, coming out of investment period to switch to improve our OpEx and come back to profitability. How we have increased our cash position in 2023. How we have improved our extra-financial, non-financial performance. Let us jump into the first point.
First, 2023, a new year of a new record of sales with now more than EUR 30 million revenues realized. So EUR 30.2 million revenues, with growth which is quite aligned with our historical trend since 10 years now. If we enter more in the details of these revenues, I would say that the main characteristic of our model is that we are switching into subscription model. We are more and more communicating on the evolution of our mostly recurring revenue and annual recurring revenue.
This gives our business model strength and a solid basis for the future. It is less impressive in terms of growth when we sign the contract, but it gives, of course, more solidity and more sustainability to our model. It is important to precise that the dynamic of the subscriptions and the development of our annual recurring revenue is high. More than 30% with close to 33% of growth. We are really in a ramp-up phase of our activity. It is, for us, something which gives us also more visibility on our future revenue evolutions, and it will probably give us a better capacity to give visibility on what we are going to deliver in the future in terms of revenue, in terms of growth, and in terms of profitability.
After that, as I explained, in this context of growth, in this context where we are increasing the annual recurring revenue dynamic, we are coming out of a period of investment, as I mentioned. So during two years, we have invested a lot. I announced that two years ago. We were about to enter a new strategic plan with two years of strong investments. We talked at the beginning of the plan about around, I would say, EUR 10 million-plus of investment. During this two years plan, we have invested in geographic deployments, in different improvements in terms of organization and model, into the industrialization of our process.
I would say some objectives have been missed, but we have also adapted our model to focus on the good points, on the right projects, the right side of the model, particularly in term of geographic coverage, capacity to focus on OT security, for example, where we have real differentiators, our capacity to maintain the high level of growth. We have made, if we compare the level of investment with the dynamic of growth during these two years, we can see that we are in a trajectory where we are currently coming back to the profitability in the second semester. So we are confident with our capability to come back to profitability during the second semester.
If we compare this ratio with the previous strategic plans driven by the company, we are in a better position than ever to come back to profitability in 2024. 2023 was a year where we made a capital increase plus a convertible bond. We found an advantageous loan with the Société Générale, which allowed us to reinforce our cash position with EUR 13 million more. So our cash position has been improving during the period. It is a very key point as it gives us an autonomy in term of cash. We don't need to come back to the investors or to the market to come back to profitability.
Last milestone about our non-financial performance. We have improved our EthiFinance rate in 2023. We are now up to the average of the sector, which is around 47%. We are at 72%. We have improved, I would say, in the different way we manage the teams, we govern, we work on the environments, et cetera. I think it's important to tell at this point of the presentation that, of course, we had questions or remarks from investors about our capacity to improve and improve and improve the extra financial performance of the company.
I just want to remind you that we are still a EUR 30 million company on a trajectory to come back to profitability. Investing a lot of efforts to, I would say, to present a good non-financial performance and to be aligned with the good standard. But we are not a big company, a big group, so we have to moderate our investment in this domain and to keep in this trajectory. I think that today we have a good extra-financial performance rate, which is quite enough convenient with the size of WALLIX today.
We are now going to jump on the figures, and I give Amaury the mic to follow up the presentation.
Okay. Thank you, Jean-Noël. First, before entering the P&L, we are going to focus on the operating expenses. As Jean-Noël explained it quite clearly, we optimized in 2023 the ratio of our structural operating expenses compared to annual revenues, which decreased in our P&L from 1.35 in 2022 to 1.24 in 2023. This improvement comes from the sales and marketing team, where we improved the ratio by 6 points, as well as from the innovation and products, with a gain of 6 points as well, after a big investment stage and cycle in 2022.
We continue to increase a little bit our investment in the customer access to bring better support and services to our customers. What we have to keep in mind is that we came from a strong investment cycle to a moment where we are initiating operational leverages with the objective to reach a ratio which is less than 1 for 1 in the second half of 2024, which means that we will be profitable in the second half of the year.
We have some identified impacts on operating profit that I would like to underline. First, the operating profit has been affected by nearly EUR 2 million of non-recurring expenses, which come from operational optimization of our organization, as well as some expenses linked to our financing and M&A operations, including the acquisition of Kleverware and our EUR 13 million financing in 2023 that Jean-Noël just mentioned. Plus, we should underline the impact of subscription in the operating profit. When you get a subscription contract, you do not recognize the full revenues at once, as you do with licenses. We estimate that the increase of subscription in 2023 had a EUR 3 million impact on the top line, which means that with the same expenses, we would get an additional EUR 3 million revenue.
Now, let us summarize our P&L. First, our revenues grew by nearly 20% to reach more than EUR 30 million in 2023, with recurring revenues increasing by 33%. Second, our recurring expenses increased by 10%, which is half the growth of our revenue, which shows that we reached the inflection point in 2023. Third, our loss, excluding non-recurring items, is virtually stable. At last, we should note a EUR 1.2 million research tax credit in 2023. Nearly EUR 18 million gross cash at the end of 2023, which is EUR 4 million more than at the end of 2022, thanks to our financing activities.
We continue to support a negative operating cash flow since the last of the exercise. We should underline our working capital under control despite our growth. CapEx are mainly capitalized development costs. Actually, what we are financing is the reach of the inflection point with the target of being profitable second half of 2024.
To conclude with the balance sheet, there is no particular subject in this balance sheet. Less shareholders' equity since we registered a loss in 2023. At the end of 2023, we have a gross cash position of EUR 17.6 million and a net of debt cash position of EUR 8.7 million. We have an increase in prepayments on income of 16%, and our debt is a long-term debt.
To conclude, as of today, we enjoy the financial structure and the cash position that allow us to pursue a virtuous growth in 2024. Jean-Noël is going to explain what are our growth and profitability leverage to reach profitability in the second half of 2024. Jean-Noël.
Thank you, Amaury. Let's now enter 2024. I think as you understood, we have three priorities, which are growth, recurrence, and profitability. Let's see how we are going to reach this profitability at the second half.
First, I would say that there are three internal leverage, which are definitely coming from this investment period we are now finishing, terminating in 2023, to enter in new realizations. I will come back on these three particular pillars of the OT, the governance market, and our new SaaS platform. In the same time, we have the luck, I would say, to enter in a period where the market is going to increase its investments in the cybersecurity space, in cybersecurity solutions, encouraged by the compliance efforts to reach a NIS2 compliance.
For the first important point, the first internal engine is coming from our investment and now clear positioning in the OT security space. We are now one of the major player of this OT security space. We have been identified and recognized by the analysts, by the customers. We have signed significant partnership alliance with Nozomi Networks, who raised recently $100 million more to, I would say, develop its model all over the world. We have a strategic alliance with Nozomi, which will help us to benefit from their dynamic and position to continue to develop, and to raise our branding and awareness in the different markets in the world.
At the same time, we have reinforced our partnership with Schneider Electric, which is a major player of the Industry 4.0 market with an integration process where WALLIX and Nozomi Networks are probably the most promising solution to bring cybersecurity inside their digital transformation offers to the customers. We are going to capitalize on this alliance, on our technology, to continue to develop our brand in the OT security space.
We reach 5% of orders two years ago. Last year, the OT security bookings represented 14% of our global bookings. We are confident now with our capacity to continue to increase the number of project customers and revenue coming from this particular positioning, mainly in the great organizations and the efforts of the organizations to manage their links, their relations with their suppliers, their supply chain. It is an important indicator and it takes a lot of place in our strategy in the different markets where we develop the company.
Second important pillar, I talked about the identity and access governance sector, where we are going now to enter in 2024. After the acquisition of Kleverware in 2023, we were able to package this solution into our software suite. We have now emphasized a program of cross-sell with our sales teams to develop value into our customers' project. We are going to earn benefits from this packaging this year with additional revenues, and we think that it could help us to be well-positioned even in the financial and insurance sector, where historically our competitors are more present. We think that this year it will help WALLIX to be a player to generate revenue on the identity and access governance sector.
Third important internal pillar directly issued from our investments since two years now is the launch of WALLIX One. WALLIX One is a new solution we have launched a couple of months ago in an early adopter program. We are now switching into a full availability program as the first customers have signed a subscription contract to this WALLIX One SaaS platform. It is a SaaS platform which will give a CIO or a CISO in an organization to deploy a cybersecurity strategy based on zero trust architecture. It is probably one of the main standard in term of IT architecture today in the United States, in Europe, Middle East, Africa, Asia-Pacific. It becomes a standard in term of architecture.
With WALLIX One, we offer either the capacity to deploy a zero trust strategy easily and with an industrialized process or to access to the different software components of WALLIX for identity management, access governance, driving a compliance process through one centralized platform. It is an important step for the company. We are going to be more competitive against our competitors today on the market with this new SaaS offer, and it gives us a full range of solutions adapted to hybrid models in the company where they could mix an on-premise approach, a SaaS approach, or an OT approach with our WALLIX software suite.
It is probably something which will give us progressively more and more capacity to bring a long-term relation with the customers with a new solution which will be more easy for us, more industrialized for us in term of deployment, in term of support and maintenance, because we are going to deploy with our CloudOps teams and to manage the solution ourselves. We think that it will have less impact in a short-term perspective on our revenue in 2024, but it will help us to develop a new category of customers or new perimeters in our customers' organizations. In a long-term perspective, it will help us to be more and more competitive and to generate more and more margins in our business model.
I talked about an external leverage, and I talked about the Directive NIS2. I could talk also about the DORA directive, which is a directive concerning the finance and insurance sector. We are now in the year of the Directive NIS2. The Directive NIS2 will target around 150,000 of companies and organization in Europe concerning 18 sectors of the economy. I would say every sector, every important sectors where these companies have been considered as essential for our daily life when the digital systems are deployed in our usage. This directive will give obligations to these companies to enhance their level of cybersecurity defense and their capacity to resist, again, the big cyber attacks of today.
We see now that more and more cyber attacks are occurring. They have more and more impact, which is normal because digital systems and device are deployed in every domains of our daily activities and every business of the company. This Directive NIS2 has an objective to reinforce the global resilience of Europe and of the economic actors in Europe. It will be particularly important for WALLIX as the management of users' identity and access is key to be compliant with the Directive NIS2 or with DORA in the financial and insurance sector. It will be a driver for our business in the coming years, and it is interesting for us as it is the core business of WALLIX.
These companies, this business in the critical sectors are the core business of WALLIX. With the certification in Germany, in Spain, in France, we feel confident with our capacity to be one of the main cybersecurity players to help the companies to comply with the Directive NIS2.
We have, I would say, produced a first contribution on the adoption of the Directive NIS2 for the companies by writing and delivering, publishing, two days ago this week, a new white paper dedicated to the Directive NIS2 and how to adapt Directive NIS2 into an organization. It concerns directly the managers of the companies, the CIOs, the CISOs, the administrators, the board, the management of the companies. It is a first contribution which will make a direct line between the obligations and the way to protect its assets regarding the law. With, of course, Steptoe, a law firm based in Brussels, we'll spend a lot of weeks, events, conference, webinars with this white paper and different other materials we have created to assist our customers and prospects in their compliance process.
I talked about different leverage, which will probably act on our top line, on the relations we develop with the customers, the business on the different markets, industrial with OT security, and the whole Directive NIS2 essential operators. But we are also in a position where we have in a trajectory to come back to profitability in the second semester of 2024. As you probably understood, we are coming back to profitability in the second half of 2024, thanks to our growth on a sustainable model with more recurring revenue produced, but also by driving different internal, five main internal leverage to hold our expense and to have an impact on the top line and to have an impact on the bottom line, to have a positive impact on our margins.
We have five main internal projects. I won't enter in the details of the whole of these five leverage, but I will emphasis on one particular point, which is our capacity to help the big organization, the big accounts to deploy, to scale the usage of our PAM solutions to their own organization. We see in a lot of big organizations today that we have a very good customer acquisition. We are able to sign first contracts and to deploy on, I would say, first perimeters. But we are not able today to deploy the solutions at the scale of the whole organization for these big companies.
It is the reason why we have created a team with a leader, Philippe Guillen, who is coming from a big consulting firm. With him, we have created and we are currently deploying an offer to help our customers, important, big customers, historical customers, to use our solutions at the heart of their information system or operational environments and to scale the usage of web solutions into their organizations. It will help us to develop big contracts in the big organizations, which are customers who are customers of WALLIX.
It is a leverage. It is something with an effect, which will have an effect on our top line. In the same time, I want to emphasize another particular leverage on the way we are purchasing in WALLIX. We have contracted with an external buying director, purchase director. We have decided to commit into a plan where we are going to earn 10% . We are going to gain 10% of margins on our OpEx and CapEx contracts in the two years coming, which will help us to be more efficient in term of expenses. It is also something which will have a positive impact on the margins of the company, and it will help us to come back to profitability in the second half.
As you understood, probably it is important for us to act on the top line to continue to. We are confident with our capacity to continue to generate hypergrowth and hypergrowth on our monthly recurring revenues and our global annual recurring revenue. We are confident with our capacity to hold with this high rate of growth. Meanwhile, we are acting. We are rigorous with the way we are going to generate margins and find rich operational efficiency. It is an important step for the company to generate a positive operating profit during the second half of 2024. As I mentioned it in the press release, it is an important step for WALLIX to generate in 2025 and the coming years a positive and profitable growth, which would generate value and margins for the company and the shareholders.
As you also understood, I think that the questions will probably allow us to talk about that. We have made strong efforts during two years, a lot of investments. We have produced strong evolutions in our business model, the way we cover the market, our go-to market model, the way we industrialize our product process, and the way we are creating a scale-up, and we are developing the company at another level. These changes are multiple. This is the reason why we feel that now that the efforts are out, are in the past, we feel that it's the right moment to give more details and a better vision on these improvements and the way we are driving the growth in the coming years, in 2024, but also in the coming years.
This is a reason why we have decided to organize a Cyber Vision Day by WALLIX on May 21st this year. You will be, of course, invited to participate if you are interested to know more about these evolutions of the company. We'll present, we'll introduce the different topics with the executives of WALLIX, the new steering committee of WALLIX, the new CTO, Mathias Przybylowicz , Julien Cassignol, our Product and Business Strategy Leader, Eric Gatrio, the new Chief Revenue Officer, our Marketing VP, Edwige Brossard. During this day, they will have the time to give more details on our future strategy, and it will be an important appointment for the investors where customers and partners could also talk about the future of WALLIX.