Avast forecasts revenue growth despite data sharing scandal
Cybersecurity firm Avast today posted a rise in profit for the full year and vowed to deliver “healthy growth” in 2020 despite the impact of a scandal over its use of data.
The London-listed firm reported revenue of $873m (£675m) in the year to the end of December, up 5.6 per cent on the previous year. Adjusted earnings rose 7.9 per cent to $483m.
Avast said it would incur a one-off cost of between $15m and $25m for shutting down its controversial Jumpshot business after it emerged it was selling data on its users to clients.
The firm also expects operating costs of $5m from winding down the marketing arm, while it will pay $73m to buy out Ascential’s stake in Jumpshot.
The charges mean Avast’s profit margin is expected to be broadly flat in 2020, though the firm forecast mid-single digit revenue growth.
Shares in Avast rose in early trading, before dropping to a fall of roughly three per cent.
Chief executive Ondrej Vlcek told City PM the cyber firm would “double down on keeping people safe and secure” following the data crisis.
Vlcek said Avast would continue to invest in its security products, while a new privacy product will be launched in the first half of this year.
The Prague-headquartered firm will also look to expand through further mergers and acquisitions.
Avast last year grew its customer numbers 3.5 per cent to 12.6m, while its retention rate edged up to 67 per cent. This was largely driven by its consumer direct desktop — the largest part of its business.
While the company is best known for its antivirus software, growth mainly came from products such as its virtual private network (VPN) and password manager.
“The core of the Avast business and our fundamental strengths remain unchanged,” Vlcek said in a statement. “Our focus on cross-sell and up-sell, our localisation strategy, and new product releases continue to drive good growth.”