F-Secure Corporation Announces Second-Quarter Financial Results

Continuing strong growth while profitability improving

Espoo, Finland - August 15, 2000

F-Secure Corporation (HEX: FSC), a leading provider of security for mobile, distributed enterprises, today announced their financial results for the second quarter. The reported revenues for that period reached € 9.8M. The operating loss was € 3.7M compared to € 5.1M loss in the first quarter. Announcements were made of partnerships with Cisco Systems, iD2 Technologies, ICL, and Arthur Andersen.

For the first half of 2000 the revenues were € 17.9M. The revenues grew faster than the costs leading to an improved operationg result compared to the previous quarter. There are also € 9.5M of deferred revenues in the balance sheet. For the first half of 2000 the operating result was € 8.8M negative. The breakdown of the revenue for the first half of 2000 (first half of 1999) is: North America 41%(24%), Scandinavia 30%(35%), Rest of Europe 20%(25%), and Rest of the World 9%(9%). Anti-virus products represented 54% of the revenue, encryption 42%, and other products 4%.

The corporation's financial position remained strong during the second quarter. The equity ratio on June 30, 2000 was 76%(2Q 1999: 23%). The interest income for the first half of 2000 was € 0.0M (2Q 1999: € 0.5M). The liquid assets were € 43.6M. Investments were made mainly in IT hardware and software for € 2.0M in the first half of 2000 (1H 1999: € 1.1M). On April 12 the Annual General Meeting agreed to the Board's proposal of a 1:5 stock split

The corporation announced in April partnerships with Cisco Systems and iD2 technlogies to jointly provide integrated security solutions to European corporate customers, as well as Security as a ServiceTM partnerships with ICL and Arthur Andersen. F-Secure also launched a new product in the second quarter, F-Secure Distributed Firewall.On August 15th F-Secure will officially lauch the creation of a wholly owned subsidiary, F-Secure Online. The subsidiary will seek new service provider partners to the corporation and boost the Security as a Service product. Mr. Kimmo Alkio will be CEO of F-Secure Online.

Key events in the early third quarter will consist of among others deals of network encryption solution for Shell, OEM agreement for F-Secure Anti-Virus with Fujitsu Siemens Computers as well as Security as a Service partnerships with 77 Degrees West, WebCentral, and MessageLabs. In August F-Secure Anti-Virus for EPOC was released for the Symbian EPOC platform.

The Group expects to continue to grow faster than the security software market and remains confident about the previously communicated long-term goals. Q3 results have traditionally been moderate due to summer holiday season, a trend which can be expected to continue. However the Group expects strong growth in Q4. The management believes the launching of F-Secure Online Solutions will speed up Security as a Service revenue generation from previous estimates starting first quarter 2001.

x)Not given, as the effect of dilution would improve the figure

* Includes the lease responsibility for the new facilities at Helsinki High Tech Center