Pexip Holding Asa · OSL:PEXIP
Pexip Holding Asa — Q3 2020 Earnings Presentation
38 slides from Pexip Holding Asa's earnings presentation, Nov 10, 2020
Slide 1: Quarterly Presentation Q3 2020
Meet the world with video communication as it should be Quarterly Presentation Q3 2020 10 November 2020
Slide 2: Important notice and disclaimer
Important notice and disclaimer These materials have been produced by Pexip Holding AS (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 representativ
Slide 3: Q3 highlights
Q3 highlights Added Accelerating long-term 70% target with one year: growth in ARR as customers 300 MUSD by 2024 + 7 new F500 accounts Visionary Private Cloud is ready 307 employees in Gartner Magic to launch up 80% year-on-year Quadrant 3
Slide 4: Business update
Business update ]pexip[
Slide 5: Video communications as it should be
✓A better way to meet with business-quality audio/video Video communications as it ✓Securely join from anywhere across multiple should be technologies ✓Powerful administration tools and integrations to meet the requirements of IT ✓Full control of data privacy and sovereignty, and compliance with dat
Slide 6: Pexip is a high-growth subscription-based video communication company
Pexip is a high-growth subscription-based video communication company Booked Annual Recurring Revenue (“ARR”) portfolio per year end, USDm 73 • Users in ~190 countries CAGR • ~300 partners in 75 countries 47 • +300 employees in 20+ countries ~70% 36 • 97% of revenue from subscriptions 29 21 EMEA Ame
Slide 7: Solid growth path to USD 300 million
Solid growth path to USD 300 million 6 1 Massive, high-growth market Solid growth path to reach with unique position towards USD 300m lucrative enterprise segment 5 2 Massively scalable business Industry recognized video model with high sustainability communication platform with impact unique techno
Slide 8: Pexip accelerates long-term target of reaching USD 300 million
Pexip accelerates long-term target of reaching USD 300 million ARR of USD 300m by end-of-2024, one year earlier than previously Revenue growth communicated 2025 EBITDA of +25% with +25% revenue growth Long-term profitability Plan for neutral to positive EBITDA in 2023, negative 25-35% EBITDA margin
Slide 9: Enterprise IT will re-assess video strategy post-Covid
Enterprise IT will re-assess video strategy post-Covid “Everybody” has started using video in 2020 Key questions to be asked by customers Do we have the features we need? Given we use video so much, are we having the right PC-to-PC has been the primary use meeting quality and experience? case Is dat
Slide 10: Pexip ideally positioned for enterprises' reality as organizations return to the office
Pexip ideally positioned for enterprises’ reality as organizations return to the office Conference rooms The new normal will be hybrid working • People combining working from home and the office • “Every” room in the office will have a video device • “Every” meeting will be a video meeting • Need to
Slide 11: Bring meetings to life
Bring meetings to life A natural, engaging meeting experience provided by AI-driven adaptive experience Bring meetings to life Focus on your conversation Say goodbye to black screens and hard-to-see faces. Naturally With real-time image framing that automatically crops, pans, arranges your screen la
Slide 12: Pexip is the leader on interoperability
Pexip is the leader on interoperability Partner • 62% of organizations use more than three video communication solutions1 • Deep technology and GTM partnerships with collaboration giants • Allows solutions from Microsoft and Google to immediately Proven interoperability connect with a range of non-c
Slide 13: Customers choose Pexip for three main use cases
Customers choose Pexip for three main use cases High-quality video Vertical market Expanding access to meetings with focus applications and Microsoft Teams and on privacy and integrations Google Meet security 13
Slide 14: Pexip named a Visionary in the Gartner Magic Quadrant
Pexip is for the second time named a Visionary in the recent Gartner Magic Quadrant • Gartner MQ is a key IT buyer awareness driver and decision support • Gartner highlights Pexip’s strengths in: • Expansive APIs • Interoperability leadership • Vertical industry expertise *Source: Gartner Quadrant f
Slide 15: Pexip continues to win the trust of new large enterprises and public organizations
Pexip continues to win the trust of new large enterprises and public organizations Selected by a range of large organizations Large organizations driving growth Selected new customers in Q3 2020 Share of ARR by account size in ARR, USD 73M YoY growth: +70% 25% 23% 43M 24% 34% 35% 30% 145% 51% 36% +
Slide 16: Enabling sustainable development for our customers and users
Enabling sustainable development for our customers and users Pexip contributes to the green economy • Pexip is committed to supporting our customers in making their business processes more sustainable – Enabling vital healthcare service delivery despite severe Covid-19 disruption – Enabling signific
Slide 17: Pexip has started on the next phase of our video communication adventure
Pexip has started on the next phase of our video communication adventure ARR target of USD 300m by 2024 Established leadership position within larger collaboration market IPO 2020 Founded 2011 *Equity of USD 25m1 turned into ARR of USD 57m at time of IPO 1) NOK 225m, USDNOK 9.00 17
Slide 18: Product update
Product update
Slide 19: Solid progress on Pexip Private Cloud pilots
Solid progress on Pexip Private Cloud pilots – commercial launch in Q4 2020 Rob Arnold, Program Manager, Unified Communications and Collaboration
Slide 20: Continue to make virtual meetings even better than in-person meetings
Continue to make virtual meetings even better than in-person meetings Service features released last three months 1080p on GW/VMRs Adaptive Composition Custom Branding • Higher resolution improving • Bring your meetings to life • Customised, branded background meeting experience • Initiated Tech pre
Slide 21: Americas
Americas
Slide 22: 10 new US Fortune 1000 companies chose Pexip in Q3
10 new US Fortune 1000 companies chose Pexip in Q3 across several industries 2 Food Service and Food Products 2 Energy 2 Technology 1 Insurance 1 Retail 1 Healthcare 1 Furnishings 22
Slide 23: Recent sales successes demonstrate Pexip's appeal to security-conscious organizations
Recent sales successes demonstrate Pexip’s appeal to security-conscious organizations • The National Aeronautics and Space Administration is an independent agency of the U.S. Federal Government responsible for the civilian space program, as well as aeronautics and space research • One of the eleven
Slide 24: Sales results and financials
Sales results and financials
Slide 25: Strong development in Annual Recurring Revenue with 70% growth YoY
Strong development in Annual Recurring Revenue with 70% growth YoY Booked Annual Recurring Revenue (ARR) development Q-o-Q growth in ARR USDm USDm 73 2.6X +70% 66 7.0 57 47 43 40 38 34 36 1.9X 2.7 1.4 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q3 2018 Q3 2019 Q3 2020 25
Slide 26: Growth across all main product lines and geographies
Growth across all main product lines and geographies ARR per geo ARR per product USDm USDm APAC AMERICAS Cloud Service EMEA YoY growth: Software YoY growth: 73 73 66 7 37% 66 57 7 57 27 101% 6 25 73% 24 47 47 43 23 43 19 6 5 20 16 13 15 15 46 55% 40 75% 42 36 37 31 30 32 23 26 Q3 2019 Q4 2019 Q1 202
Slide 27: Significant improvement in new sales in Q3 2020
Significant improvement in new sales in Q3 2020 Development in ARR portfolio last twelve months USDm +25% -10% +70% • Year-on-year growth increased to 4.2 72.8 +55% 10.5 70% out of Q3 2020 from 64% out of Q2 2020 23.5 Net retention of 115% • Majority of growth driven by net new sales, up from 46% in
Slide 28: NOK 136 million in Q3 revenue with 68% revenue growth
NOK 136 million in Q3 revenue with 68% revenue growth Quarterly revenue development Q1 2019 – Q3 2020 Comments NOKm Operating revenues – Cloud service • Overall year-on-year growth of 133% to NOK 60 million due to strong sales across a number of accounts, especially driven by a +68% large account in
Slide 29: Strong progress on acceleration plan
Strong progress on acceleration plan Number of employees Other Engineering • Increased sales capacity key element of Sales and Marketing supercharging existing sales model 307 +80% • Continuing to add high-quality software 31 engineers to deliver on roadmap 116 Have also strengthened corporate funct
Slide 30: Increase in operating expenses from higher headcount
Increase in operating expenses from higher headcount Quarterly OPEX development Q1 2019 – Q3 2020 Comments NOKm IPO-related costs Other operating expenses Salary and personnel expenses Other Operating expenses • Have increased investments in marketing in order to capitalize 158.9 on the increased de
Slide 31: Reduction in EBITDA in line with acceleration plan
Reduction in EBITDA in line with acceleration plan Quarterly Adjusted1 EBITDA development Q1 2019 – Q3 2020 Comments NOKm 37.3 40.4 32.0 • Reduction in EBITDA due to planned acceleration investments in Sales and R&D capacity increasing Employee Benefit 19.8 Expenses 11.5 13.0 – 45% of employees (whi
Slide 32: Cash flow bridge
Cash flow bridge Cash flow bridge Q3 2020 Comments NOKm • Have a solid cash position to fund our acceleration plan, which is also impacting 1,217 cash flow 24 9 11 1,159 30 3 6 • Increase in net working capital driven by an increase in trade receivables and contract cost assets • CAPEX is 25% higher
Slide 33: Summary
Summary ]pexip[
Slide 34: Third quarter in brief
Strong top line growth • Added a range of new high-profile Fortune 1000 companies and large public organizations • Outstanding quarter especially in the Americas • Continued strong ARR growth with USD 7 million • 68% year-on-year growth in revenue Third quarter in brief Executing on the acceleration
Slide 35: Outlook
Positive medium- and long-term outlook for video communication • Majority of enterprises shifting to a hybrid workforce • Pexip’s technology is uniquely positioned to meet these new customer needs Will continue to execute on growth plan • Increase investments in future growth by adding talent in sal
Slide 36: Upcoming dates
Upcoming dates Investor Tech Summit December 9th 2020 at 15-17 CET Update on Annual Recurring Revenue January 7th 2021 Q4 2020 quarterly presentation February 11th 2021 36
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Slide 38: Quarterly Presentation Q3 2020
Meet the world with video communication as it should be Quarterly Presentation Q3 2020 10 November 2020