Press Release: WISeKey Provides a Summary of its 2021 Key Business Milestones
WISeKey Provides a Summary of its 2021 Key Business Milestones
Geneva, Switzerland, December 29, 2021 -- Ad-Hoc announcement pursuant to Art. 53 of SIX Listing Rules- WISeKey Holding Ltd ("WISeKey", NASDAQ: WKEY, SIX: WIHN), a leading cybersecurity and IoT company, today is providing investors with a summary of its key business milestones for 2021. Of note, WISeKey discussed these recent business developments, M&A activities, year-to-date financial and operational milestones, expectations for full year 2021 and growth catalysts for full year 2022 and beyond during its Investor Day held at the NASDAQ MarketSite in Times Square, in New York City on December 13, 2021.
WISeKey's full year revenues for 2021 are expected to be around $20 million, a 32% increase year-over-year, however, based on orders recently received and the demand from its clients, WISeKey had an annual revenue potential of $30 million, had COVID related supply issues not been in a factor.
Carlos Moreira, WISeKey's CEO noted, "During 2021, WISeKey broke barriers and reached significant milestones. We ended 2021 we an impressive number of new agreements and made significant progress towards achieving our primary objective of transforming WISeKey into a globally competitive and profitable company. We also learned some valuable lessons about why clients selected WISeKey as their security partner -- they wanted a) an integrated end-to-end security solutions platform that was easy to deploy, b) at a price that was appropriate for their market risk, and c) backed up by the support of a company that has already proven its credibility in the cybersecurity market for over two decades. We are enthusiastic about the team we have in place, our product portfolio, and the opportunities we see ahead of us."
Following a year of significant investment and strategic realignment, backed by a strong cash, cash equivalents and restricted cash position of $33 million at the end of Q3 2021 (from $17.4 million at June 30, 2020), we now find ourselves ideally positioned for the future. This cash position means that we have reserves available to quickly make key strategic investments and also continue to finance our business units whilst we support and develop our revenue generation in the AI and NFT segments. Our intangible assets and goodwill on the balance sheet have increased as a result of the acquisition of arago with trademarks and HIRO technology."
Increased demand on our historic "bread and butter," being the IoT and PKI revenues.
-- Demand for our IoT products has been unprecedented in 2021 and has reached a point that we are now sitting on a backlog of non-cancellable purchase orders totaling $33.4 million, and we are currently receiving an average of $1.0 million of new orders per week. This is a growth of 500% against the 2020 equivalent position and has given us a great building block that allows our sales team to really focus upon developing prospective clients and new opportunities. We are expecting to see a significant increase in the number of clients served by WISeKey in this sector by 2023 / 2024. -- Also, the acquisition of a controlling interest in arago, created a new revenue stream with combined cybersecurity/authentication and AI Knowledge Automation offerings. This acquisition was strategic for WISeKey to establish a foothold into the AIoT market. During the year we invested a total of $13.0 million in arago, including the original acquisition investment, took steps which led to a significantly reduce the cost base, as well as the repayment of historic balances, without affecting the client facing part of the business.
NFT and Blockchain product Developments
-- Launched of WISe.Art, our NFT platform for the collectible and luxury
market (https://www.wise.art). The global market for non-fungible tokens
(NFTs) surged to new highs in the second quarter of 2021, with $2.5
billion in sales so far this year, up from just $13.7 million in the
first half of 2020, as marketplace data showed. The NFT market is
expected to surge again especially on the high-end NFT market which is
the market segment where the WISe.Art platform operates. WISeKey's
WISe.Art NFT platform follows a series of market tests -- selling high
value NFTs and testing the appetite of the art and collectible community
-- and incorporates the needs of this exclusive and high-volume
marketplace.
-- WISe.Art NFT revenue stream is an entirely new platform for which
revenues are expected to come on-line in 2022 with the full launch of the
platform. The revenue streams arising from WISe.Art will be split across
two key areas.
-- Firstly, we will be charging commissions on the sales that are
carried out on the WISe.Art platform. This will be a percentage of
the total sale and will depend upon multiple factors but,
ultimately, will be a relatively straight-forward revenue
transaction.
-- Secondly, we are offering a white label version of the WISe.Art
platform that can be taken by clients that wish to have their own
branded platform for auctions and sales. Here we would generate a
one-off fee for the platform sale, as well as fees for the set-up
and installation, with an ongoing hosting, maintenance and support
packages being added with a separate annual fee. Our intention is
that, with the hosting still being carried out by WISeKey,
commission fees would also still apply to the sales on the
platform.
-- We have identified many potential clients with both a backlog of
parties interested in placing products for WISe.Art auctions in
2022, and others who are discussing the white label option.
Sales and Marketing
-- Made significant investments in new talent and have expanded our sales force including the appointment of a new CRO and a new COO to take advantage of higher demand for strong security, authentication, brand protection and anti-counterfeiting services for segments such as connected devices, connected cars, luxury products, pharmaceuticals, and banking/financial sector. -- We have diversified our approach to selling and are building a range of strategic sales and distribution partners. We have signed two partnership arrangements, one covering Europe and India and a second that covers Southern Africa. Our partnership covering a large section of Europe has already generated sales of $1.5 million (annualized), scheduled to be delivered between Q4 2021 and Q3 2022 and should lead to recurring revenues. This strategy enables us to tap into larger sales networks and provides access to a larger range of potential clients in markets where we do not currently have the size and scale to expand operations ourselves. We have worked to balance the fee structure on these agreements to ensure that the partner is sufficiently incentivized to sell our products without creating a large, fixed cost base. -- Adapted to the new teleworking environment by developing a special edition of WISeID Digital Identification and Cloud that is now available as a free download. The WISeID app secures interactions of locked-down teleworkers around the globe and help companies reduce cybersecurity risks. PKI and Digital Certificates secure email messages and reduce risks by ensuring authenticity of messages and enabling encryption of confidential data. The WISeID Platform is available for anyone to obtain a digital certificate and immediately protect their email.
Semiconductors Innovation and R&D
-- Developed NanoSealRT, an NFC Forum Type 5 semiconductor chip that works with both Android and IOS 12 devices: one essential patent granted in March 2021 to this product by the E.U. and the Chinese Patent Offices, will further reinforce our position as a major Smart Label system provider, in traceability, anti-counterfeiting and consumer engagement applications. -- Investments in R&D: we continue to support our R&D work with $2.1 million invested in the half year of 2021 to develop new products and create business opportunities in cybersecurity, IoT, Microprocessors, NFT and AI.
Partnerships
-- Reinforced our strategic partnerships as we joined the SAP(R) PartnerEdge Program. The program gives partners access to resources, services and benefits that will help WISeKey build and maintain a successful partnership with SAP and optimize business results for clients. WISeKey has been working on IoT security by integrating OISTE/WISeKey's Managed Cryptographic Root of Trust secure IoT Devices with devices leveraging SAP Leonardo(R) IoT. -- Strategic Alliance with Polygon: a full-stack Ethereum scaling solution to offer Trusted NFT solutions to the masses. Polygon has become the blockchain of choice for NFTs, NFT marketplaces, and blockchain games. Its ultra-low transaction fees and sustainable Proof-of-Stake (PoS) consensus mechanism makes Polygon a more practical option for activities such as minting and trading NFTs. Polygon Studios, the Gaming and NFT arm of Polygon already works with most today's top blockchain-based Web 3.0 games and NFT projects, including Decentraland, Opensea, Sandbox, Somnium Space, Decentral Games, and has 6x more gaming and NFT Dapps than any other chains outside of Ethereum main chain at around 300+ gaming and NFT Dapp. -- Strategic Alliance with CasperLabs: CasperLabs and WISeKey will build a marketplace on Casper for deploying large-scale digital identity
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