F-Secure’s Antivirus and Intrusion Prevention Revenues Reaches New Record, Growth Rate Of 62%

F-Secure reported revenues of 11.7 million euros for the second quarter of 2004 and the operating result was 1.7 million euros positive. This reflects a significant improvement in profitability compared to corresponding quarter in 2003.

Anti-virus and intrusion prevention (content security) revenues increased by 62 % to a record level of 9.8m. Service provider business increased by 162 % and past quarter was the 13th consecutive quarter when the growth exceeded 20%.

Anti-virus and intrusion prevention represented 85% (67% in Q2/2003) of the revenues, while encryption represented 14% (31% in Q2/2003), and other products 1% (2% in Q2/2003).

The Group’s four business areas grew as follows:

The corporate customer sector grew 33% to 6.9m and the service provider business represented a growth of 162% to 1.9m. The consumer segment reached a growth rate of 30% from the first quarter in 2004 with turnover of close to 1.0m. Handheld and wireless security revenues represented less than 1% of the antivirus and intrusion prevention business. This business sector is expected to grow through increased operator awareness in mobile security issues.

Frequent wins in product reviews have testified the high quality and ease of use of F-Secure’s products which has accelerated F-Secure’s succesful business during the past year. Customers have been very satisfied with F-Secure’s capability to respond to new virus alerts faster than its major competitors.

The key service provider partners, Deutsche Telekom in Germany and Wanadoo in France, continued to increase the business. The Group signed the first Security as a Service cooperation agreement in the USA with Charter Communications, one of the largest cable operators in North America. Other announcements included com.hem (Sweden), WEB.DE (Germany), C-MI Labs (UK) and Telephoenix (Switzerland). The total number of announced Service Provider partnerships was 26 at the end of the second quarter, an increase of 5 partners from Q1.

“Our visions of changing data security threats have proven to be right and we have shifted from “plain vanilla” anti-virus products to a broader approach to content security and intrusion prevention. We continue the development of our channel in our home market in Europe and the Security as a Service business as well as web sales (e-Store) with a global focus. Marketing campaigns will continue to promote the importance of all-encompassing content security and speed of up-dates as well as to underline the richness of the Group’s offering in that field. The second quarter exceeded our expectations and we expect an improvement in EBIT for the full year 2004 compared to 2003″, says Mr. Risto Siilasmaa, President and CEO of F-Secure Corporation.

A press and analyst conference will be arranged today, August 3, 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 report for Q3 2004 will be published on October 26 (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 on the Group’s web site.

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