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WISeKey Records H1 Net Income of $21.8 Million Bolstered by Company Cybersecurity/IoT Refocus

WISeKey Records H1 Net Income of $21.8 Million Bolstered
by Company Cybersecurity/IoT Refocus


 Improved financial position supports investments in new products, IP and faster-growing IoT/Cybersecurity markets such as connected cars and IoT/pharmaceuticals


To host a conference call on Wednesday, September 4, at 3:00 p.m. CET / 9:00 a.m. ET

ZUG, Switzerland- September 3, 2019– WISeKey International Holding Ltd (SIX: WIHN) (“WISeKey” or the “Company”), a leading Swiss cybersecurity and IoT company announced today its financial results for the six-month period ended June 30, 2019 (“H1 2019”).

H1 2019 Highlights

  • Stronger financial position with a $18.4 million cash balance at June 30, 2019, excluding $4.8 million restricted cash, up $9.2 million from December 31, 2018, due to the sale of the SSL/TLS PKI business.
  • H1 2019 net income of $21.8 million, mainly due to the $31.1 million gain generated from the sale of its SSL/TLS PKI business. For H1 2018, WISeKey reported a net loss of $10.7 million.
  • H1 2019 total revenue of $14.4 million following the sale of our SSL/TLS PKI business in Q1.
  • Repaid in full its $25.3 million outstanding debt to ExWorks Capital on January 17, 2019.  As a consequence, all WISeKey collaterals provided as security for the ExWorks Capital debt were released.
  • At June 30, 2019, WISeKey’s net convertible debt position was $4.9 million compared with $30.7 million convertible and non convertible debt at December 31, 2018.
  • WISeCoin AG net debt of $4.0 million convertible into WISeCoin Tokens to be issued at STO.
  • Submitted a confidential draft registration statement on Form 20-F under the U.S. Securities Exchange Act of 1934 to the U.S. Securities and Exchange Commission (SEC), following the board of directors approval of a proposed listing of its Class B Shares in the form of American Depositary Shares on a U.S. stock exchange.
  • Launched of a 3-year share buyback program (after receiving approval from the Swiss Takeover Board) to purchase up to 3,682,848 of its class B shares, which is equivalent to 10% of WISeKey’s registered share capital.

H1 2019 Key Financials

  6 months ended June 30,
(Million US$) 2019 2018
Net revenue 12.5 16.6
Gross profit 4.9 7.8
Operating loss as reported (7.9) (4.6)
Net gain / (loss) attributable to WISeKey as reported 21.8 (10.7)
Non-US GAAP    
Total Group revenue 14.4 25.9
EBITDA (7.2) (4.0)
Adjusted net gain / (loss) attributable to WISeKey (5.2) (6.6)
  As of
(Million US$) June 30, 2019 December 31, 2018
Total cash and restricted cash 23.2 9.8

H1 Business Highlights

  • Strengthened the company’s investment in IOT security with the release of NanoSeal® (scheduled for Q3 2019).
  • Expanded its partnership with Microsoft Corporation:  all members of the Cybersecurity TechAccord are expanding their partnership on initiatives that improve the security, stability and resilience of cyberspace.
  • Announced partnership with Oracle:  WISeKey Blockchain Identity technology became one of Oracle’s first external trusted identity providers, allowing clients to securely add data onto the Oracle Blockchain Platform using the WISeKey cryptographic key infrastructure.
  • Reinforced its penetration in the Chinese technology market: WISeKey’s Root of Trust was accredited by 360 Security Browser to provide Trusted SSL Services in China.  360 Security Browser is the leading internet browser solution in China, with an estimated user base superior to 400 million active users and a market penetration close to 70%, according to CNZZ.
  • Signed a perpetual license agreement with Daimler AG (“Daimler”), one of the world’s most successful automotive companies, for certain components of its ISTANA PKI platform with first payment of $2.5 million
  • Joined forces with OpSec Security IoT leader on Brand Protection and Authentication of IoT EcoSystems.
  • WISeKey Blockchain Centers of Excellence: WISeKey in cooperation with the Blockchain Research Institute (BRI) is creating a number of interconnected Blockchain Centers of Excellence around the world, to facilitate the rapid adaptation and on-boarding of blockchain-based solutions and foster stronger collaboration between the public, private and academic sectors. Each center purchases technologies and licenses from WISeKey.
  • Strategic partnership with Chinese CoinID New Mingwah, a World leading bank-level Blockchain security technology company to integrate CoinID wallet into WISeID and deploy in China. WISeCoin AG and Coinx8 Ltd have entered into a partnership to jointly foster their respective crypto tokens WIS and CXE in Asia, MEA and Europe using Exchange.
  • New agreements for the smart car, pharmaceutical and fintech industries, and consumer products which, in the aggregate, are broadening the ecosystem of WISeKey’s IoT chips.
  • Stronger cybersecurity offering of proprietary solutions, increased footprint and further new customer acquisitions.
  • Continued investments in IoT Security, with strong industry-specific partnerships.
  • Further enhancements of the vertical platform for the IoT through the establishment of partnerships with leading players in the IoT domain.
  • Expansion of patent portfolio with new IP and patents with the aggregation of 39 IoT / Semiconductors patent families (more than 200 patents in total) to its portfolio (
  • WISeKey closed the acquisition of a 22% interest, through a multi-million USD transaction, in Tarmin Inc. (“Tarmin”), a Boston, Massachusetts based leading pioneer of Data & Software Defined Infrastructure delivering a massively scalable, transparent and unified approach for consistent data management, storage, retention, security and search across cloud and traditional storage infrastructure.

Strong cash position supports growth initiatives
Cash and cash equivalents together with restricted cash increased to $23.2 million at June 30, 2019 as compared to $9.8 million at December 31, 2018.

In January 2019, we received net cash proceeds of $35.8 million (total purchase price of $45 million) from the sale of our SSL/TLS PKI business. WISeKey used the cash proceeds to repay in full the Line of Credit with ExWorks Capital Fund I, L.P. in the amount of $25.3 million. This substantially improved the Company’s financial position and paved the way for significant investments in growth initiatives. 

The group’s working capital significantly increased to $15.2 million at June 30, 2019 compared with $4.9 million working capital at December 31, 2018.

H1 2019 Revenue
H1 2019 total group revenue was $14.4 million showing a decrease from prior year due to the sale of our SSL/TLS PKI business (which accounted for $9.3 million revenue in H1 2018), and the loss of 4 clients and reduced sales staff transferred during the sale of the SSL business currently in the process to be recruited.

Moreover, our IoT activity was adversely affected by the overall downturn in the semiconductor industry worldwide.  This downturn, linked to the political and trading tensions between the U.S. and China and the rising threat of protectionism and vulnerabilities in emerging markets, has affected all IoT and microprocessors companies (according to the Semiconductors Industry Association, 2019 mid-year global semiconductor sales were down 14.5% as compared to 2018). However, our Swiss technology neutrality and the release of NanoSeal® which is scheduled for Q3 2019, are expected to provide some support and stabilize IoT revenue for the remainder of 2019, and pave the way for revenue growth starting in 2020.

A demand-driven oversupply in the IoT market will push pricing down 42.1% in 2019 and the oversupply is expected to extend through the second quarter of 2020. The decline is due to signs of a slower demand recovery at the hyperscale vendors and the increasing inventory levels of IoT/Semiconductors vendors.

The ongoing dispute between the U.S. and China is causing uncertainty over trade rates. U.S.-imposed restrictions on Chinese businesses are based on security concerns and will have a longer-term impact on semiconductor supply and demand. These combined issues will accelerate China’s domestic semiconductor production, as well as create local forks of technologies such as ARM processors. Some manufacturing will relocate outside China during the dispute and many companies will seek to diversify their manufacturing base to reduce any further disruption.

Also, the industry specialists continue to forecast growing adoption rates in cybersecurity technology which WISeKey should benefit from: according to IDC, global investment in digital transformation initiatives could almost double in the next five years. IDC thus expects $6.1 trillion of direct investment in hardware, software, and services from 2019 to 2022, with a compound annual growth rate (CAGR) of 17.5% for the years 2017 through 2022 (compared to a 1.5% CAGR for non-digital transformation investments).

Our geographic breakdown of sales from continuing operations is consistent with prior periods with most of our revenue coming from European and North American customers. As compared to H1 2018, revenues from European and North American customers declined, while revenue from Asian customers increased by 54% due to new agreements and partnerships signed in 2018.

Net sales by region from continuing operations 6 months ended June 30, 
USD’000 2019   2018  
Europe 5,544  44%   8,495  51%
North America 5,369  43% 7,111  43%
Asia Pacific 1,416  11% 922  6%
Latin America 140  1% 76  0%
Total Net sales from continuing operations 12,469  100%   16,604  100%

H1 2019 Gross profit
H1 2019 GAAP gross profit decreased to $4.9 million (gross margin of 39%), from H1 2018 gross profit of $7.8 million (gross margin of 47%).  Due to the long manufacturing cycle of our IoT activity, and in order to reduce the lead time to our customers, we start the manufacturing cycle early. However, with the downturn in the semiconductor industry, some customers were left with excess stock at the end of 2018 thus reduced their order volumes for the first half of 2019 on a very short notice, which did not allow us to adapt our manufacturing cycle. As a result, our cost of sales was heavily frontloaded in the first half of 2019 while deliveries were pushed for the second half of the year.  Thus we expect our margins to substantially improve in the second half of 2019 once these products are delivered to our customers.

H1 2019 EBITDA and operating expenses
Our EBITDA for H1 2019 was a loss of $7.2 million compared to a loss of $4.0 million in H1 2018, due to lower gross profit for the current reporting period.

H1 2019 operating expenses slightly increased to $12.7 million, as compared to $12.4 million in H1 2018. Operating expenses include the following categories:

  • R&D expenses of $2.6 million slightly decreased by $0.2 million in H1 2019 due to IT cost savings and staff movements.  WISeKey will continue to invest in R&D in order to maintain its leading edge technology position and the competitive advantage of its product offerings. Investments in R&D are focused toward reinforcing WISeKey’s integrated end-to-end Foresight platform , integrating Cybersecurity, IoT and Blockchain technologies, enabling intelligent enterprises and offering business value embedded cybersecurity combining software and hardware solutions.
  • Selling & marketing (“S&M”) expenses increased by $0.6 million or 22% due to renewed efforts to strengthen sales and marketing teams. Management believes that these investments will raise awareness on WISeKey’s unique security offerings and its product range, and thereby support a return to revenue growth.
  • General and Administrative (“G&A”) expenses decreased by $0.3 million due to lower stock-based compensation fees of $0.5 million, a $0.2 million decrease in non-income tax expenses and a $0.1 million decrease in audit and accountancy fees, offset by an increase of our professional and legal fees related to the divestiture of our SSL/TLS PKI business.  
  • Finally, in H1 2018, we reported a one-time credit of $0.3 million in relation to the liquidation of a subsidiary. There was no such credit in H1 2019.

Carlos Moreira, CEO of WISeKey, commented, “Following the sale of our SSL/TLS PKI business and repayment of our debt, we made the strategic decision to focus our efforts and investments on growing our IoT/Cybersecurity/Blockchain business.  With a solid 2020 to 2023 Cybersecurity/IoT revenue pipeline of over $250 million, and a growth strategy that includes additional investments and increased marketing efforts, we believe that we have positioned WISeKey well to take advantage of several growth opportunities to create new revenue streams. Now is the right time to initiate the next phase of value creation and innovation for all WISeKey stakeholders with a forecasted listing on the NASDAQ or NYSE by the end of 2019. WISeKey now has the assets we need to deliver the CyberSecurity IoT platform we planned for many years. Our priorities are integration, running a more efficient company and using our partners for things that WISeKey shouldn’t be doing itself. We will also take a disciplined approach to capital allocation, including our current 3 years share repurchase program. By running a more focused WISeKey, we will deliver significant margin expansion across both our core businesses.”

Peter Ward, CFO of WISeKey, noted, “Our confidence is supported by our strong cash position which we believe is adequate to finance our growth initiatives.  At June 30, 2019 we had cash and restricted cash of $23.2 million and a working capital of $15.2 million and we reduced our net debt to $9.0 million as compared to $30.7 million at December 31, 2018.”

Conference Call & Webcast
Carlos Moreira, CEO and Peter Ward, CFO will host a conference call on Wednesday, September 4, 2019, at 3:00 p.m. CET / 9:00 a.m. ET to discuss these results, recent business developments and growth initiatives. A Q&A session will follow the prepared remarks.

Interested parties may participate in the call by dialing:

United States & Canada 877-445-9755
United Kingdom (fixed): 0 800 756 3429
Germany (fixed) / (mobile): 0 800 182 0040 / 0 800 184 4713
France (fixed) /excl. Monaco: 0 800 912 848
Switzerland (fixed) / (mobile): 0 800 835 525 / 0 800 891 374
Spain (fixed) / (mobile): 900 834 236 / 900 834 876

To access the call, please dial-in approximately five minutes before the start time.
The call will also be simultaneously webcast over the Internet via the following link

 and such link will also be made available in the “Investor Relations” section of WISeKey’s website

2019 H1 Interim Report
Additionally, investors may download the 2019 H1 Report from WISeKey’s website at

Non-GAAP Financial Measures
In managing WISeKey’s business on a consolidated basis, WISeKey management develops an annual operating plan, which is approved by our Board of Directors, using non-GAAP financial measures. In measuring performance against this plan, management considers the actual or potential impacts on these non-GAAP financial measures from actions taken to reduce costs with the goal of increasing our gross margin and operating margin and when assessing appropriate levels of research and development efforts. In addition, management relies upon these non-GAAP financial measures when making decisions about product spending, administrative budgets, and other operating expenses. We believe that these non-GAAP financial measures, when coupled with the GAAP results and the reconciliations to corresponding GAAP financial measures, provide a more complete understanding of the Company’s results of operations and the factors and trends affecting WISeKey’s business. We believe that they enable investors to perform additional comparisons of our operating results, to assess our liquidity and capital position and to analyze financial performance excluding the effect of expenses unrelated to operations, certain non-cash expenses related to acquisitions and share-based compensation expense, which may obscure trends in WISeKey’s underlying performance.  This information also enables investors to compare financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management. 

These non-GAAP financial measures are provided in addition to, and not as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. The presentation of these and other similar items in WISeKey’s non-GAAP financial results should not be interpreted as implying that these items are non-recurring, infrequent, or unusual.  Reconciliations of these non-GAAP measures to the most comparable measures calculated in accordance with GAAP are provided below in a schedule entitled “Financial Reconciliation of GAAP to non-GAAP Results (unaudited)”.

Financial Reconciliation of GAAP to non-GAAP Results (unaudited) 6 months to June 30,
(Million US$) 2019 2018
Revenue from continuing operations 12.5 16.6
Revenue from discontinued operations 1.9 9.3
Total Group revenue 14.4 25.9
Operating loss as reported (7.9) (4.6)
Non-GAAP adjustments:    
Depreciation expense 0.4 0.4
Amortization expense on intangibles 0.3 0.2
EBITDA (7.2) (4.0)
Net gain (loss) attributable to WISeKey as reported 21.8 (10.7)
Non-GAAP adjustments:    
Stock-based compensation 0.2 1.1
Depreciation expense 0.4 0.4
Amortization expense on intangibles 0.3 0.2
M&A-related legal fees 0.5 0.5
M&A-related professional fees 0.7 0.1
Gain from the divestiture of a business (31.1)
Debt extinguishment loss / (gain) 1.3
Debt discount amortization 0.2 1.7
Loss / (gain) on derivative 0.1
Financial charges 0.4 0.1
Adjusted Net gain (loss) attributable to WISeKey (5.2) (6.6)

The Company encourages investors to carefully consider its results under GAAP, as well as its supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand its business. Non-GAAP financial results are reported in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.

About WISeKey:
WISeKey (SIX Swiss Exchange: WIHN) is a leading global cybersecurity company currently deploying large scale digital identity ecosystems for people and objects using Blockchain, AI and IoT respecting the Human as the Fulcrum of the Internet. WISeKey Microprocessors Secures the pervasive computing shaping today’s Internet of Everything. WISeKey IoT has an install base of over 1.5 billion microchips in virtually all IoT sectors (connected cars, smart cities, drones, agricultural sensors, anti-counterfeiting, smart lighting, servers, computers, mobile phones, crypto tokens etc.).  WISeKey is uniquely positioned to be at the edge of IoT as our semiconductors produce a huge amount of Big Data that, when analyzed with Artificial Intelligence (AI), can help industrial applications to predict the failure of their equipment before it happens.

Our technology is Trusted by the OISTE/WISeKey’s Swiss based cryptographic Root of Trust (“RoT”) provides secure authentication and identification, in both physical and virtual environments, for the Internet of Things, Blockchain and Artificial Intelligence. The WISeKey RoT serves as a common trust anchor to ensure the integrity of online transactions among objects and between objects and people. For more information, visit

Press and investor contacts:

WISeKey International Holding Ltd
Company Contact: Carlos Moreira
Chairman & CEO
Tel: +41 22 594 3000
WISeKey Investor Relations (US)
Contact: Lena Cati
The Equity Group Inc.
Tel: +1 212 836-9611

This communication expressly or implicitly contains certain forward-looking statements concerning WISeKey International Holding Ltd and its business. Such statements involve certain known and unknown risks, uncertainties and other factors, which could cause the actual results, financial condition, performance or achievements of WISeKey International Holding Ltd to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. WISeKey International Holding Ltd is providing this communication as of this date and does not undertake to update any forward-looking statements contained herein as a result of new information, future events or otherwise.
This press release does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, and it does not constitute an offering prospectus within the meaning of article 652a or article 1156 of the Swiss Code of Obligations or a listing prospectus within the meaning of the listing rules of the SIX Swiss Exchange. Investors must rely on their own evaluation of WISeKey and its securities, including the merits and risks involved. Nothing contained herein is, or shall be relied on as, a promise or representation as to the future performance of WISeKey.