Hello, everybody. Good to be with you. My name is Timo Laaksonen, and I am the President and CEO of F-Secure. Let's get going. Here is a few facts about who F-Secure is as a company, if you do not know it from before. Here are numbers on the left mostly from 2022. Our revenue was EUR 111 million with 4.5% growth. We have adjusted EBITDA of roughly EUR 44 million. That meant about 40% margin. We are a very profitable company. We have people in 17 countries currently. We have customers in about 100 countries. We have a very partner-focused business, and we have roughly 200 of them. We have 516 employees at the end of September. Our cash conversion is pretty magnificent at about 96%. Earnings per share has been EUR 0.17. Our revenue by channel, like I said, we are a very partner-centric business.
Roughly 80% of our business is through partners, 20% is direct. If you go onto our website or into a mobile app store, you can buy our product from there. That is 20% of our revenue. If you look at our regional split of the revenue, it is roughly 1/3 Northern Europe, 1/3 the rest of Europe, 1/3 North America, and then about 6% in Asia-Pacific and Japan, roughly. It says 29% right now for North America. It is because our numbers for the acquisition we made earlier this year have only been taken into account for seven months of the year. Next year it will be roughly 1/3 . Those are the vital statistics of F-Secure. We are a very global and a very profitable company. What is it that we are solving for people out there? We are a consumer cybersecurity company.
First of all, two out of three people find that getting security and being secure online is just way too complex. However, three out of five say that they are willing to pay for more simple experiences. Three out of five, that is a pretty good indication that if we can solve this problem of being less complex, if not easy and simple, then there is a good business awaiting us. Secondly, there are many more digital moments in our lives where we are now vulnerable. We have listed some of them here on the slide. There are situations such as emails, messaging on mobile devices. It may be paying bills, doing banking, shopping, playing games, even dating. In all of these situations, there are certain things that expose us to scams, and that is what we want to do.
Not only do we want to be simple and understandable and relatable as a service, we want to actually do what it says on the TIN, protect people from scams. Finally, this is also about the simplicity. Three out of four people worry about their security online. People typically want security that covers all of their needs. It is very hard to go piecemeal and have the expertise to pick and choose different consumer security products to keep you safe in the different digital moments where you may be entering. That is why we want to provide a holistic service, one that covers all your relevant needs. Finally, I would say that what is the business we are in? We are in the business of sense of security online. Whatever fits that is fine for us.
We asked in a survey in June, what are the things that people are most worried about when they're online? If you look at the left here, you can see that out of the top seven things that consumers have named, six carry the word scam. If consumer cybersecurity is difficult when you talk about endpoint security or antivirus or VPN or identity protection, then understanding words like scam calls, SMSes, credit cards, social media, and so forth. If that's understandable to people, then we should use those same words when we communicate to people. How do you then solve this problem of keeping people safe from scams? That's depicted on the right here on the slide. Let's say that an attack starts by targeted phishing messages.
Messages that, for instance, contain a link that lead us into a site where our data is stolen, and it's not a site that we thought it was. It's just collecting our information, stealing our information. Our SMS protection or smishing protection, as we call it, can stop this kind of a message right away before it even enters our inbox. If the message gets through for whatever reason, and there is a malicious link, and you click on the link, then our browsing protection stops the attack. If even that does not work, then we have malware protection, which actually stops info stealing and transfer of data from our device to a malicious site.
If even that doesn't work and our usernames, passwords, personal information gets to the dark web, we have a service we call identity monitoring and a chat and human service we call cyber help, that helps you. Am I in trouble? Was my data breached? What should I do? We cover the whole solution from start to finish, end to end. In enterprise security world, this is called the kill chain, that you can stop the attacker at any point in time, and that's what we intend to do with our solutions. We provide our services in two different shapes. One, on the left, is the single app we call Total. It includes all of our capabilities. It's either F-Secure branded or it is co-branded with our partners who take the service to market, such as communication service providers, insurance companies, banks, and so forth.
That's what people are used to seeing as F-Secure. On the right, we have something which we established as a business a year ago, which is embedded security. We take certain security capabilities, such as identity monitoring, breach notifications, social media monitoring, wiping our footsteps on the web, or even endpoint security capabilities or VPN, and embed those into applications and networks that people may already have. Applications such as a communication service provider's application, such as My Telia or My Elisa here in Finland, or it may be in the network in a home Wi-Fi router. We embed security capabilities into services that people already have, so that they don't have to download a new application. They don't have to learn how to use a new application or create new credentials.
That makes, once again, consumer security much, much easier for the large masses out there who are not necessarily willing to do the work of downloading a new application. Here are some examples. AT&T on the left side, whose ActiveArmor application is based on our embedded security. In the middle, we have Touch 'n Go from Malaysia, a payment provider. On the right, we have a communication service provider whose Wi-Fi and home management application comes with embedded home security capabilities. We are expanding our market reach. As I've said, we're a very partner-focused business, so we've traditionally been providing our services through communication service providers or operators, whatever you prefer. We've been very strong in regional leading operators or tier 2s, tier 3s.
But now, after our recent acquisition, we're also a much more formidable player to address tier 1, let's say the 20 biggest communication service providers in the world. We're expanding our target market on that front. Also, something that we've done in the past couple of years, we've been signing up new partnerships in what we call new verticals, banking and insurance, and now we're also looking into financial technology and insurance technology players to embed, especially consumer security capabilities. The ones marked new here typically have a preference for embedded security propositions, because then we can extend the value proposition of an existing application or service that these tier 1s or fintech or insurance tech companies are already providing. Direct business, as before, e-commerce channel and app store channel.
By 2026, which is not that far away, only three years, we expect to have an addressable consumer base of over 1 billion consumers out there. That's a major enhancement to where we are today, and very much also thanks to tier 1s that we're looking at. A rough estimate of our consumer reach right now through the partners we have currently is about 500 million . We're halfway there. We want to provide the best partner experience. I've said several times that we're a very partner-centric company. How do we do that? First of all, we've got smaller partners who are tier 3s and so forth in different markets, and there are thousands of them.
We want to serve them, and we want to have a very standard type of an offering, but very configurable for them so that it serves best their purposes. We are working on increasing the level of automation of the integration delivery and go-to-market support that we provide to these partners. Tier 2s, very valuable. There are maybe hundreds of them in the world. On that front, we may be leveraging the configurable standard offering and automated integration, but we also have a higher touch sales and service model. When we get to the tier 1s, there are tens of those in the world, we most likely pull together a partner-specific solution using the readily available modules and embedded security capabilities we have.
And then we are busy right now building a dedicated tier 1 sales delivery and operational capability so that we can serve these partners, not only single ones, but a larger group of them in the future. That is the way we go about it. Then, I used to work for a company where the CEO said that if you sometimes feel that you are lost in the forest of many opportunities in your market, do not worry, this is the right forest to be lost in. I would say the same thing about consumer cybersecurity. There are tons of opportunities in here. It is a very big market, and there is growth for all.
A company that had EUR 111 million of revenue last year, not only can we get some market share from our competitors, but there are certain pockets of the market that are growing at a very nice pace. Our growth fundamentals for next year and moving forward, we are increasing our addressable market through extending our partnerships to also cover tier 1s and new verticals, and also by developing our best partner experience. Secondly, we are increasing our value by converting our customers from the single apps they used to have from F-Secure to our single app, which is called Total. So we are converting both our partners as well as our direct customers into Total, which has a higher average revenue per user. Secondly, embedded experiences is in a way a new market that we are entering, which allows us to grow our business. Finally, it is about culture.
Let us say that this is the adrenaline that we are shooting into our veins, an aspirational culture where we have a global growth mindset and the agility to bring innovation into the market. So how are we then working to become the leader in security experience? This year has been very much about Total. We launched the single product in February, and we have been replacing standalone products ever since. This will continue still in 2024. In 2024, once we get the clicker working, it is about agility. So we intend to double our customer base with a service that talks to people. More engaging service, and that is destined to come out from September onwards with a combined product by F-Secure and the business we acquired, Lookout Life.
Then in 2025, the number one security experience is already visible in all lines of our business, in the single app and in embedded security, which is aimed to help us grow a double-digit level in revenue. Then in 2026, we want to be the undisputed leader in serving tier 1s with consumer cybersecurity services. This is our strategic roadmap moving forward. So the business we acquired last spring, early summer, is called Lookout Life from the U.S., from where we have got a lot of agility and growth mindset, which is affecting the whole company. We are very rapidly converging our products. So starting from September, October 2024, we will have a single product that we provide.
Now we clearly have the right to win very mobile-centric partners and also tier 1s as we now have a good number of references to go with, such as AT&T, T-Mobile, Sprint, and NTT DOCOMO in Japan. The integration with the consumer business has largely progressed as planned. We completed the transaction on June 1st, and from there on, we have consolidated the numbers from Lookout Life into our financial numbers. For instance, in quarter three, that was already visible fully. We have had no attrition of Lookout Life staff up until now. There are some delays in the growth of Lookout Life, slightly longer sales cycles, as is typical in partner business. We had some challenges in our integration processes, especially during summer and early fall. I would say we are clearly over that by now.
We have got our teams to work together on the next generation product, as I have said, coming out at the turn of third and fourth quarter in 2024, so very good work. We have also adjusted our strategy now to take into account the capability to serve mobile-centric partners and larger tier 1 partners on the back of this acquisition. So we have made strategic gains also on this front. In quarter three, our revenue was up by roughly 26%. Organic growth, however, was quite small. So most of this growth was thanks to the acquisition. Our direct channel was declining slightly, a few percentage points, and our partner channel grew just over 1%. But overall, still a growth business, albeit small at this moment in time. Our gross margin and adjusted EBITDA.
Gross margin has gone slightly down because of the combination of the companies, where some of the offerings have been more project-centric, but that is stabilizing now. On the adjusted EBITDA and EBITDA margin side, we had a low point in quarter two, but we are showing an upward trend slightly again in quarter three. We will soon see how quarter four will look like. Our delivered numbers in 2022 have been already mentioned earlier.
Our outlook, which was updated in September, revenue of EUR 128 million-EUR 132 million this year, and adjusted EBITDA in the range of EUR 41 million-EUR 45 million. Our targets for 2026, revenue over EUR 200 million, adjusted EBITDA after we have got over the integration phase of Lookout Life, over EUR 42 million, and dividend yield remains around 50% or above of our net profit on an annual basis, and our net debt ratio to adjusted EBITDA to be below 2.5x. That is all from me. Thank you.
Thanks, Timo, for a great presentation. We have some more interesting questions.
All right. Let's hear it, [Werner].
The first one, as I mentioned in my presentation, the AI has been the theme of the year, and this is quite wide question, but how is artificial intelligence changing cybersecurity landscape?
There's three different things. One has to do with threats. Both the attackers and the defenders can use generative AI as a tool. We've been using machine learning and artificial intelligence in our threat protection engineering for 15 years. But generative AI is bringing in new kinds of capabilities. Let's say that we have already a couple of services which are leveraging generative AI in the protection side of things. That improves. At the same time, the attacks are better. When you used to get these clumsy emails or SMS messages with spelling mistakes and so forth, it won't be the case anymore. There may be somebody who calls you who you know very well, and the voice is precisely the right voice, but it's not the person. Also the attacks will be, in a way, more devious. That's a difference.
And then thirdly, we can actually improve the experience and simplify the experience to consumer security by, in a way, explaining more from your point of view what is relevant for you right now. What is the service doing for you, and how you might actually do a better job in keeping yourself safe. On that front, generative AI is also helping to create a better and richer user experience.
Hmm. Europe is clearly falling behind U.S. in almost everything tech related, unfortunately. How is the situation in cybersecurity?
I would say that there are very strong cybersecurity companies in Europe. Unfortunately, many of them have been acquired by American companies like the ex-Norton Symantec, nowadays called Gen Digital, has acquired players like Avira and Avast. But there are still many good players in Europe. I'd say that the biggest ones in consumer cybersecurity are indeed in the U.S., Gen Digital and McAfee. And then there are several mid-sized players in Europe, and then practically one in Asia, Trend Micro. Many of the companies who are active in consumer cybersecurity still have enterprise security and consumer security under the same roof. As we've seen in the case of F-Secure, many companies are de-merging because the technologies are starting to be different. The solutions, the customers, and the channels are so different that it actually makes sense to have separate companies.
But Americans are very strong, but we see absolutely lots of possibilities for differentiation through innovation. We have no reason to bow our heads down and throw in the towel, the opposite.
It is not a disadvantage to be a European company in this space.
Absolutely not. It is not. From our point of view, one of the big reasons why we made the acquisition of Lookout Life is that we were able to strengthen our position in the world's fastest growing and biggest consumer cybersecurity market, which is North America. We have better feelers in the market now.
Exactly. Continuing from this topic, do you see cybersecurity becoming more political topic as the geopolitical stability has deteriorated during the past few years? Will this affect your business in a way?
There are a few things that point to that direction. For instance, Kaspersky originating from Russia, has seen clear headwinds in the recent past, for obvious reasons. That is a geopolitical effect. Otherwise, I would say that as we go and start protecting people's identity, privacy, we need to store data, and we need to store data that has to do with single individuals, like Robin Pulkkinen. Where is that data stored? That is a political question. It is not a political question that politicians typically solve. It is our partners who say that "We are in Canada, we want the data to stay in Canada," or, "We are in Germany, and we want data to stay in Germany." In the era of cloud computing, that is a bit of a tough one, isn't it?
Mm. Yeah.
As long as the data remains within the European Union, for instance, or within the confines of the U.S., it is typically fine for the partners coming from these directions. But let us see. European Union has just approved certain regulations that have to do with connected home devices and their security levels so that they are allowed to be sold in the European area. There is politics in there, but mostly it is partners putting requirements on us where user data may be stored.
Interesting. But then there is one monster-sized company in the cybersecurity space called Microsoft. How big of a threat Microsoft is from your perspective with its huge resources?
Yeah. Microsoft is a phenomenal company, aren't they?
Mm-hmm.
If you look at the last 10 years, for instance, of what they've managed to do, especially in enterprise security side, formidable advances. On the consumer side, I would say that we are yet to see anything of the sort. If you're a Windows user, then you may be happy with the Defender doing endpoint protection. I think I presented quite clearly how there are many more digital moments now, and in a way, scam types that are not covered by endpoint protection. We are yet to see Microsoft entering into those fields. Doesn't mean that they couldn't, but at least we haven't seen that happen and we're very happy to fill that void.
Thanks, Timo, for interesting answers, and thanks for the great presentation. I'd like to remind that you can follow all these three companies at Inderes.fi or .se and check their analysis and other interviews and videos as well. At this point, I'd like to say, read analysis and make good stock picks. Thanks for watching.