F-Secure antivirus business grows by 40% in Q2

Aug 02, 2005: Strong growth in the ISP channel and consumer business

The successful execution of the company's strategy resulted in strong profitable growth during the second quarter of 2005. This is now the 4th consecutive quarter when F-Secure grows faster than all of its most significant competitors. For F-Secure the first half of 2005 has been a period of strong investments in its main business areas, including new R&D projects and sales and marketing initiatives, as well as recruiting new professionals. The total amount of employees was 366 persons at the end of the quarter, an increase of 27% compared to last year. The total revenues for Q2 grew to € 14.7 M and EBIT was €1.5 M.

"The quality of our workforce remains a key factor of our success. The ability of our fellows to be inventive, professional and to sustain a high level of quality in their work is of prime importance for our customers as F-Secure provides them with business continuity and peace of mind. This becomes even more important as the basic nature of IT security is transformed from a product to a service. Providing security as a service is our cornerstone strategy and an industry trend that F-Secure is consciously creating and pushing," says Mr. Risto Siilasmaa, CEO of F-Secure Corporation.

F-Secure is the market leader for the European ISP security market. The sustained success of the company's ISP business was continued with an 87% growth in Q2, and 6 new significant partnerships with ISP's were announced during the quarter. After the end of the Q2 the company also announced a partnership with PCCW, a major ISP from Hong Kong. This is an important milestone for the company's expansion into the Asian market. F-Secure now has a total of 63 ISP partners.

Approximately two thirds of the revenues of F-Secure come from outside of the Nordic countries. The growth has been especially strong in Western Europe, and as an example the consumer business has been growing very rapidly in Germany. The total growth rate for the company's consumer business was 121% in Q2. The company has also continued its systematic investment to communicate its BE SURE brand promise in key European markets.

For its corporate customers the company launched the F-Secure Anti-Virus Client Security 6.0 product in Q2. This product combines a number of features, including protection against spyware, adware, hacking, viruses, worms, code changes and zero day attacks, under one centrally managed interface. The company also made a significant investment in its new Data Security Lab, which now includes an RF-shielded room making it possible to investigate wireless viruses. "We put a lot of effort into strengthening our technology leadership. Cybercriminals are developing new malware with increasing professionalism and financial motivation, and consequently traditional protection is not enough anymore," says Mr. Pirkka Palomäki, Executive Vice President of R&D at F-Secure.

F-Secure has a confident view of the future, and believes 2005 will be a breakthrough year for delivering Security as a Service not only for consumers, but also for corporate customers. The company continues to focus on developing its channel resellers and service partners both in Europe and in North America.

The company also believes its long-term investment in developing mobile security will be fruitful as the significant change in the mobile threat scenario has made mobile operators increasingly aware of mobile security issues. The wide publicity of several new mobile malware incidents during the first half of the year will gradually lead to an increased usage of mobile security solutions.

For stock exhange release, please visit:
http://www.f-secure.com/investor-relations/news/

Financial Reporting

A press and analyst conference will be arranged today at 11 am Finnish time at the Group’s Headquarters, Tammasaarenkatu 7, Helsinki. A conference call for international investors and analysts will be arranged at 1530 Finnish time (1430 CET, 1.30 pm UK time). Instructions can be found at
http://www.europe.f-secure.com/investor-relations/

Quarterly reports for 2005 will be published on October 25 (Q3). A Stock Exchange bulletin will be sent at 9 am Finnish time to the Helsinki Exchanges, a press and analyst conference will be arranged at 11 am Finnish time in Helsinki, and an international conference call will be arranged in the afternoon. Full details will be provided later in the Group's web site.

Additional information:

F-Secure Corporation
Risto Siilasmaa, President and CEO, tel. 358 9 2520 5510
Taneli Virtanen, CFO, tel. 358 9 2520 5565