Pexip Holding Asa · OSL:PEXIP
Pexip Holding Asa — Q3 2021 Earnings Presentation
36 slides from Pexip Holding Asa's earnings presentation, Nov 11, 2021
Slide 1: Quarterly Presentation Q3 2021
Meet the world with video communication as it should be Quarterly Presentation Q3 2021 November 11, 2021
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: Presenters
Presenters Øystein Dahl Hem Åsmund Fodstad Interim CEO and CFO President Global Sales & Marketing Michel Sagen Tom-Erik Lia Chair of Board Chief Strategy Officer Q&A: IR@pexip.com 3
Slide 4: Pexip has successfully solved the complex video needs of large organizations
Pexip has successfully solved the complex video needs of large organizations since its inception Booked Annual Recurring Revenue 100 (“ARR”) portfolio per year end, USD million 82 CAGR • Investing raised capital for growth in 2020 and 2021 70% • Accelerated ARR growth 47 and normalized investment le
Slide 5: Pexip's differentiated customer offering is underpinned by unique technology
Pexip’s differentiated customer offering is underpinned by unique technology Core transcoding Run on any compute platform Private Cloud On-premise SaaS Self-Hosted • All compute heavy operations done in Pexip nodes • Pexip can run on all cloud providers and on-prem • Unique patented architecture • U
Slide 6: Unique technology powers our success in three core markets
Unique technology powers our success in three core markets Video infrastructure with interoperability to Critical video meetings Video enablement for private and secure for healthcare, judiciary, Microsoft Teams and environments government, retail and finance Google Meet 6
Slide 7: These three core markets represent a massive market opportunity
These three core markets represent a massive market opportunity Pexip intends to have a leadership position in a Well-positioned to benefit from mass adoption 5 BUSD segment by 2024 of video communication Video-centric Unified 20+ BUSD in 2024 +4.4X Communications (UC) End-user video 70% market adop
Slide 8: Q3 Operational Update
Q3 Operational Update
Slide 9: Recent highlights
Recent highlights 37% y-o-y NOK 183 million Executing on growth growth in ARR to in Q3 2021 revenue strategy; -22% EBITDA USD 100 million 34% y-o-y growth margin for Q3 2021 Named a Challenger in Acquired Skedify to Starting to see impact Gartner’s Magic enhance Pexip’s from investments in Quadrant
Slide 10: Pexip is finding great success in our three core markets
Pexip is finding great success in our three core markets Video infrastructure Critical video meetings Video enablement with interoperability to Microsoft for private and secure for healthcare, judiciary, Teams and environments government, retail and finance Google Meet 10
Slide 11: Pexip is finding great success in ultra secure meetings segment
Pexip is finding great success in ultra secure meetings segment APAC use cases: 1 Deliver Ultra secure / EU use cases: highly private platforms to Americas use cases: the military and 1 Deliver Ultra secure / highly governments 1 Deliver Ultra secure / highly private platforms to the private platfor
Slide 12: 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 customer wins in Q3 2021 Share of ARR by account size in ARR, USD +37% 100M YoY growth: 22% 20% 73M 25% 22% 32% 24% 56% 47% 51% Q3
Slide 13: Have substantially strengthened the team since IPO
Have substantially strengthened the team since IPO, expect employee growth below ARR growth in 2022+ Have scaled the team to drive future growth Nearing the end of the aggressive expansion – Number of employees expect employee growth below ARR growth in 2022 Sales and Marketing R&D +60% • Expect to
Slide 14: Pexip named a Challenger in the 2021 Gartner Magic Quadrant
] pexip[ wv Pexip named a Challenger in the 2021 Gartner® Magic Quadrant™ for Meeting Solutions Gartner
Slide 15: Pexip is continuing to gain industry recognition
A challenger in the Gartner Magic Quadrant Pexip is continuing to gain for Meeting Solutions1 industry recognition 2020 2021 2020 Pexip 2019 2018 15 Source: 1) Gartner Maginc Qudrant for Meeting Solutions, October 2021
Slide 16: Skedify
]pexip[ acquires Sskedify.me
Slide 17: Skedify strengthens Pexip's offering in Video Enablement pillar
Skedify strengthens Pexip’s offering in Video Enablement pillar Video infrastructure with interoperability to Critical video meetings Video enablement for private and secure for healthcare, judiciary, Microsoft Teams and environments government, retail and finance Google Meet 17
Slide 18: Skedify offers next-generation scheduling technology for hybrid customer engagements
Skedify offer the next-generation scheduling technology for hybrid customer engagements “ Skedify is the bridge between the digital customer journey and the face-to-face conversation with our Phone Video personal advisors. “clearly After implementing Skedify we saw huge efficiency gains on both side
Slide 19: The Skedify solution is highly complementary to Pexip
The Skedify solution is highly complementary to Pexip Pre-meeting In-meeting Post-meeting Future Lead Performance, opportunity to Pexip Video + Qualification & Scheduling Operational & take advantage Meetings Enhancement CX insights of Pexip in- meeting AI 19
Slide 20: Skedify transaction
Skedify transaction Pexip have acquired 100% of the shares in Skedify B.V. for an Enterprise Value of EUR 8.0 million on a cash and debt-free basis – Equity value of: • EUR 1.59 million in cash settlement • 275,917 Pexip shares valued at NOK 85 – Net financial debt including working capital adjustme
Slide 21: Sales and Financial Performance
Sales and Financial Performance
Slide 22: 37% growth in Annual Recurring Revenue – Added 7.1 million in Q3 2021
37% growth in Annual Recurring Revenue – Added 7.1 million in Q3 2021 Booked Annual Recurring Revenue (ARR) development Q-o-Q growth in ARR USD million USD million • Q3 2021 growth in ARR of 100 USD 7.1 million, compared to +37% 93 USD 7.0 million in Q3 2020 87 7.0 7.1 and USD 2.7 million in Q3 82 2
Slide 23: Solid growth contributions from all geographies and products
Solid growth contributions from all geographies and products ARR per geo ARR per product USD million USD million APAC AMERICAS Pexip as-a-Service EMEA YoY growth: Self-hosted Software YoY growth: +37% 100 100 93 27% 93 87 9 87 82 9 82 9 61% 73 8 73 43 35 40% 38 7 32 35 29 33 28 27 25 23% 52 55 37% 5
Slide 24: New customers represent the main driver for ARR growth
New customers represent the main driver for ARR growth with 37% in the last twelve months Development in ARR portfolio last twelve months USD million • Continue to increase last twelve +11% -11% +37% months sales to new customers +37% – Strong performance especially in 8.1 7.8 99.8 US Federal 26.8 N
Slide 25: ARR growth driving revenue growth
ARR growth driving revenue growth Quarterly revenue development Comments NOK million Self-hosted Software Operating revenues – Pexip as-a-Service Pexip as-a-Service • Overall growth of 31% year-on-year to NOK 78 million, below ARR growth due to currency and high sales in Q3 2021 with delivery in Q4
Slide 26: Increase in operating expenses from planned investments in Sales and R&D capacity
Increase in operating expenses from planned investments in Sales and R&D capacity Quarterly OPEX development Comments NOK million IPO-related costs Other Operating expenses Other operating expenses • Overall increased activity level, while travel expenses remain Share option costs low – expect this
Slide 27: Executing on communicated growth strategy
Executing on communicated growth strategy Cash flow from Significant investing activities investments per quarter headcount, impacting EBITDA in sales-related Comments NOK million, cash outflow • Investments outweighing growth in revenue, -12 leading to lower EBITDA • YTD EBITDA-margin of -25% in li
Slide 28: Cash flow bridge
Cash flow bridge Cash flow bridge Q3 2021 Comments NOKm • Negative EBITDA and net working capital -107 main contributors to cash flow 1,030 40 • Negative development in Net Working 6 62 Capital in part related to holiday pay 923 periodization, and high billing volume at the 17 2 4 end of the quarter
Slide 29: Robust underlying profitability in line with mid-term ambition
Robust underlying profitability in line with mid-term ambition of growth + EBITDA above 50% Illustrative EBITDA build-up NOK million last twelve months (Percent of revenue) • Last twelve months +36% revenue growth of 36%, 769 OPEX assuming normal gross margin of 90% and (100%) 693 75 (90%) investmen
Slide 30: Starting to see impact of investment in new hires on sales to new customers
Starting to see impact of investment in new hires on sales to new customers Average sales to new customers YTD 2021 Ratio to experienced reps • Hires from 2020 are starting 2013-2019 1.0X to be fully ramped with regards to new sales, in Q1 2020 1.1X particular Q1 and Q2 cohorts Q2 2020 0.7X • Ramp-u
Slide 31: Approaching the next phase of investment plan
Approaching the next phase of investment plan Booked Annual Recurring Revenue (“ARR”) portfolio per year end, USD million 300 • Investing raised capital for growth in 2020 and 2021 • Accelerated ARR growth and normalized investment level in 2022 improving profitability 82 • Return to profitable grow
Slide 32: Summary and Outlook
Summary and Outlook
Slide 33: Q3 2021 in brief
Solid top line growth • Continued ARR growth with USD 7.1 million in Q3 2021/37% y-o-y growth • Continue to win major customers in our core markets • NOK 183 million in revenue for Q3 2021, +34% compared to Q3 2020 Q3 2021 in brief Executing on the acceleration plan • Continue to build sales and R&
Slide 34: Outlook
Positive outlook for video communication Will continue to execute on growth plan • Nearing the end of the accelerated investment phase – expect ARR growth substantially above people growth for 2022 • Plan for negative 25-35% EBITDA margin in 2021/2022, neutral to positive EBITDA in 2023 • Target 202
Slide 35: Upcoming dates
Upcoming dates Capital Markets Day December 9, 2021 Q4 2021 ARR Update January 10, 2022 Q4 2021 quarterly February 10, 2022 presentation 35
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