Change in calculation method for gross margin in F-Secure income statement
F-Secure changes the calculation method for gross margin in its income statement. Some of the costs previously recorded in F-Secure income statement as Cost of revenue have been included in Research and development and Sales and marketing costs. F-Secure applies the new calculation method for gross margin as of 1 January 2024 and publishes revised comparable financial information on 2023 financials.
Previously, development related hosting costs, customer support and delivery costs have been reported as part of Cost of revenue above the Gross margin in the income statement. Following the reclassification to F-Secure 2023 income statement, EUR 2.3 million transfers from Cost of revenue to Sales and marketing costs, and EUR 1.9 million to Research and development costs. According to the new calculation method the Gross margin for 2023 would have been 90.9% (reported 87.7%).
The change in the calculation method does not impact F-Secure revenue, earnings (EBITA, EBIT) or 2024 financial guidance.
The impact of revised Cost of revenue to F-Secure 2023 financials and a description of the revision is presented below and quarterly data can be found in the appendix to this release.
The revised financial information included here within is unaudited. All figures in the following tables are EUR thousand unless otherwise stated. The figures are subject to rounding which may cause some inaccuracies in aggregate column and row totals.
Revised financial figures for 2023
| REPORTED | REVISED |
| | 1-12/2023 | 1-12/2023 |
| Revenue | 130,371 | 130,371 |
| Cost of revenue | -16,025 | -11,814 |
| Gross margin | 114,346 | 118,557 |
| Other operating income | 830 | 830 |
| Sales and marketing | -34,698 | -36,996 |
| Research and development | -25,583 | -27,496 |
| Administration | -25,398 | -25,398 |
| EBIT | 29,497 | 29,497 |
| Financial income | 6,995 | 6,995 |
| Financial expenses | -8,815 | -8,815 |
| Profit before taxes | 27,677 | 27,677 |
| Income tax | -5,316 | -5,316 |
| Result for the period | 22,360 | 22,360 |
| Other comprehensive income | | |
| Items that may be reclassified to profit or loss: | | |
| Exchange difference on translation of foreign operations | -1,990 | -1,990 |
| Comprehensive income for the period | 20,370 | 20,370 |
Background for the change
The change in the calculation method aimed at identifying costs directly linked to the production costs of F-Secure's software products and services. In previous reporting, F-Secure's Cost of revenue included also development related hosting costs, customer support and delivery costs which are fixed costs in nature or not variable related to changes in revenue. In the revised model customer support and delivery are presented under Sales and marketing costs whereas development related hosting is presented under Research and development. The revised Gross margin captures costs related directly to production which are variable based on company's revenue. These are mainly production related hosting and royalty costs as well as some merchandise costs.
For additional information, please contact:
Sari Somerkallio, Chief Financial Officer, tel. +358 40 356 9251
F-Secure in brief
F-Secure is Finland headquartered and globally operating consumer cyber security company. F-Secure offers award-winning security and privacy products and services that make every digital moment more secure, for everyone. F-Secure operates in over 100 countries, has ~200 Service Provider partners and is the global leader providing security through Communication Service Providers. F-Secure Corporation is listed on Nasdaq Helsinki Ltd. Read more: www.f-secure.com
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