Attractive market trends support long-term growth opportunity
Yubico operates in the IAM submarket advanced authentication, whose global market size in 2021 was estimated to USD 3.3 billion and is expected to show strong growth development and increase by approximately 13.6% per annum between 2021 and 20271. The market growth is underpinned by strong global trends such as an increasing number of cyberattacks, regulation, shift to advanced authentication in the workforce, shift toward passwordless, cloud migration and trends toward ESG which drive the demand for Yubico’s solutions.
Compelling value proposition and clear competitive advantages
Yubico’s world-leading authentication solutions provide high security through phishing-resistant MFA and have been tried at scale. YubiKeys have a strong track record of zero successful known hacking attempts, to date. Additionally, Yubico’s high-quality hardware and firmware rely on a global secure supply chain, which the Company fully controls in relevant aspects, to ensure the highest level of security throughout the production. Yubico’s products are backed by an extensive service package including flexible support, personalization services and partners for ease of deployment, which makes Yubico’s offering hard to replicate. Moreover, the YubiKeys are easy-to-use with all computers and mobile devices and provide flexibility as they are based on open standards. The combination of a high level of security with user-friendliness makes Yubico’s offering highly differentiated compared to competitive technologies and gives strong competitive advantages.
Unique customer base from being trusted by global market leaders – creating a deep defensible moat
Yubico has a remarkable customer base spanning across several sectors and clients include some of the largest global technology companies. Yubico continuously works with attracting new clients as well as expanding the current accounts to further build on its unique and diversified customer base.
Strong financial characteristics with exceptional track-record of organic growth
Yubico has shown rapid organic growth with a growth rate of approximately 50% per annum between 2016 and 2022, while maintaining a stable gross margin of around 80%. 2022 was an outstanding year with Yubico demonstrating a year-over-year growth of 80% and returning to profitability, which increased the EBIT margin by 22 p.p. to 14%. After investing in the organization over the last few years, the company is ready to further scale up the business, capitalize on the strong operational leverage and focus on profitable growth.
Proven strategy supported by strong underlying pillars as well as multiple growth vectors
Yubico has a proven strategy which is supported by multiple growth initiatives ahead, including expanding the current customer base, expanding to customers’ customers and third-party suppliers, landing new customers across all industry verticals, and entering new authentication adjacencies.
Strong management team and solid organizational setup to continue successful scale-up
Yubico has an experienced management team with deep industry knowledge, and several members of management have been with the Company since its founding. The Company’s employees come from global leading technology companies, with extensive experience in technology-focused business development. Yubico’s CEO Mattias Danielsson has been with the Company for more than a decade and has vast experience from the sector including co-founding and leading the e-commerce platform Tradera which was later acquired by eBay. Yubico’s technology-focused organization combined with the management team’s knowledge and competence work seamlessly together with the founders Stina and Jakob Ehrensvärd who will continue being operational, makes the Company well-positioned to further scale up the business and execute the growth strategy.
 IDC, Market Insights on Advanced Authentication, 2023