Pexip Holding Asa · OSL:PEXIP
Pexip Holding Asa — Q3 2022 Earnings Presentation
31 slides from Pexip Holding Asa's earnings presentation, Nov 10, 2022
Slide 1: Quarterly Presentation Q3 2022
Quarterly Presentation Q3 2022 November 10, 2022
Slide 2: Important notice and disclaimer
Important notice and disclaimer These materials have been produced by Pexip Holding ASA (the "Company“, and with subsidiaries the “Group”). The materials have been prepared for the exclusive use of persons attending an oral briefing and meeting to which these materials relate given by a representati
Slide 3: Powering video everywhere
Powering video everywhere The video technology platform that powers everything from ultra secure government meetings, to personalized banking, to efficient hands-free work 3
Slide 4: Pexip's focused and differentiated approach addresses a massive market opportunity
Pexip’s focused and differentiated approach addresses a massive market opportunity • MS Teams Video conferencing/ 20+ BUSD communication • Zoom in 2024 • Google Meet • Webex 5 BUSD Secure Spaces Pexip core in 2024 solution areas Video Innovation Connected Spaces Source: Wainhouse Research, company e
Slide 5: Pexip is focused on addressing customer needs in three core solution areas
Pexip is focused on addressing customer needs in three core solution areas Other key players Target customers: Connected Spaces ARR: When you have several 61m video solutions that USD need to work together Target customers: Video Innovation ARR: When an embedded or 21m custom video solution is USD r
Slide 6: Will pursue different strategies in Pexip's two solution areas
Will pursue different strategies in Pexip’s two solution areas Connected Spaces Video Innovation Secure Spaces • Well defined mature market where Growing markets with huge potential Pexip has a leading position • Secure Spaces is driven by increasing focus on security, with many organisations requir
Slide 7: Q3 highlights and key areas of focus
Q3 highlights and key areas of focus 2023 Financial targets Results and cash Cost program • Phase 1 of cost reduction • EBITDA of NOK –56 million • NOK 100-150 million 2023 program completed with an excl. restructuring costs - EBITDA annualized NOK 184 million significantly lower costs than • 40% EB
Slide 8: Solid progress on cost reductions support 2023 financial targets
Solid progress on cost reductions support 2023 financial targets Cash flow from Operational investing cost base activities per quarter development Cashprofitability 2023 flow from investing activities per quarter targets NOK million, annualized NOK million 100-150 -184 ~-400 1,339 169 1,156 118 56 ~
Slide 9: 2023 financial targets
2023 financial targets • Flat to positive development in revenues overall Revenue • Targeting 20%+ ARR growth in Secure Spaces and Video innovation Profitability • EBITDA of NOK 100-150 million for 2023 • EBITDA cash conversion1 of 40% Cash flow • Positive cash flow run-rate out of Q1 2023 1) Free c
Slide 10: Q3 2022 Sales Development
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Slide 11: Loss of one significant customer leading to decline in ARR compared to Q2 2022
Loss of one significant customer leading to decline in ARR compared to Q2 2022 +1% 106 106 106 +37% 100 101 93 • ARR of USD 101 million at the end of Q3 2022 87 82 73 • Decline in Q3 was mainly driven by the loss of one large contract (USD 4 million) and decline in legacy areas (USD 2 million) Q3 Q4
Slide 12: Growth in three focus areas - decline in legacy
Growth in three focus areas - decline in legacy Secure Spaces Video Innovation +3.3 • In Q3, a large contract (USD 4.3 million) +0.1 was terminated due to loss of funding for 18.0 19.0 20.7 21.2 21.3 the customer, which is the main driver for 10.0 11.0 11.1 13.5 10.1 the decline in Secure Spaces Q3
Slide 13: Churn compensated by sales to new customers
Churn compensated by sales to new customers Development in ARR portfolio last twelve months -5% -11% +17% +1% 4.7 • Excluding a single large customer loss in 17.1 Q3, churn is slightly down compared to the 99.8 11.5 100.7 previous quarter (USD 7.2 million compared to USD 8.1 million out of Q2 2022)
Slide 14: New wins: Continued momentum in Connected Spaces
New wins: Continued momentum in Connected Spaces Large win with a leading global technology Partnering with Google to provide unrivalled company interoperability for all Pexip customers • Pexip won a significant contract with a • Video systems with Pexip’s Room Connector leading global technology co
Slide 15: New win: Valtori
New win: Valtori • Valtori is the Government ICT Center in Finland – the provider of information and communications technology services for the Finnish government • Valtori selected Elisa Videra as their main integration partner with Pexip Secure Collaboration at the core of the service, for their s
Slide 16: New win: ZuluCare
New win: ZuluCare • ZuluCare delivers custom telemedicine and e-health solutions optimized with AI in the cloud. Zulucare offer patient engagement with easy interactive patient calls along with equipment and patient location tracking to healthcare Video Innovation providers and the U.S. Government.
Slide 17: Pexip is creating an eco system driving video innovation
Pexip is creating an eco system driving video innovation Pexip Marketplace Developer Portal Developer Community Just launched! developer.pexip.com community.pexip.com A singular entry point for all A developer-focused repository A developer-focused discussion internal & external stakeholders to incl
Slide 18: Q3 2022 Financial Results
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Slide 19: Q3 2022 Financial results
Q3 2022 Financial results Profit and Loss Comments NOK million Development • 3% increase in year-on-year revenue, driven by Q3 2021 Percent growth in Pexip-as-a-Service P&L item Q3 2022 Revenue 189.2 182.9 3% • Improved Cost of Sale from efficiency measures giving a gross margin of 89% Cost of sale
Slide 20: +3% revenue increase and improved gross margin
+3% revenue increase and improved gross margin Quarterly revenue development Comments NOK million Self-hosted Software Pexip as-a-Service Operating revenues +3% • Overall growth of 36% year-on-year to NOK 106 million on 266 Pexip as-a-Service 229 222 YoY growth: • Overall decline of -21% year-on-yea
Slide 21: Improvement in OPEX from initial impact of cost reductions
Improvement in OPEX from initial impact of cost reductions Quarterly OPEX development Comments NOK million Salary and personnel expenses • 21% decline overall compared to Q2 – 3% y-o-y increase on Salary and personnel expenses +14% excluding share option related costs 290.3 26.8 • Costs in Q3 are lo
Slide 22: Progressing on cash flow improvement
Progressing on cash flow improvement Cash flow bridge Q3 2022 Comments NOKm • Cash flow of negative NOK 39 million driven by a negative EBITDA, and a positive working -39 capital development 525 • Positive impact on currency holdings in USD 56 486 from the higher USD/NOK exchange rate 3 2 9 14 17 •
Slide 23: Outlook
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Slide 24: Summary & Outlook
Return to profitability • Rapid return to profitability and growth is #1 priority • Target EBITDA of NOK 100-150 million in 2023 with 40% cash conversion Summary & Outlook ARR development • Continued good underlying momentum for Secure Spaces and Video Innovation • Closed several new wins in focus a
Slide 25: Upcoming dates
Upcoming dates FEB 14 Q4 2022 Report and Presentation MAR 31 2022 Annual Report 25
Slide 26: Q&A
Q&A Please send to IR@Pexip.com 26
Slide 27: Appendix
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Slide 28: Productization of our offering to clearly face customer needs
Productization of our offering to clearly face customer needs Connected Spaces Secure Spaces Video Innovation Build-your-own solutions Ready-made solutions Enterprise Room Connector Secure Meetings Video Technology Platform Engage Keep your mission-critical Create custom workflows with Connect prosp
Slide 29: Pexip interop solution for Microsoft teams mainly addresses SIP-based video rooms
Pexip interop solution for Microsoft teams mainly addresses SIP-based video rooms SIP-based video rooms using Native Microsoft Teams Rooms BYOD room Microsoft CVI • Easy to join meetings, no matter the • Fully integrated solutions • Easy connection as login is through a technology or workflow comput
Slide 30: ARR development across geographies and products
ARR development across geographies and products ARR per geo ARR per product USD million USD million APAC AMERICAS EMEA Pexip as-a-Service Self-hosted Software +6% YoY growth: YoY growth: 106 106 106 106 106 106 100 101 100 101 10 10 11 3% 9 9 7% 48 46 47 39 38 39 3% 43 46 35 37 -4% 55 57 58 56 55 -1
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