Slide 1: Quarterly Presentation Q2 2023
Quarterly Presentation Q2 2023 August 10, 2023
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: Q2 highlights and key areas of focus
Q2 highlights and key areas of focus Transformation on track Revenue and ARR development Results and cash • Successful transformation conducted with new lean organization delivering • Q2 EBITDA of NOK 8 million, up • Q2 revenue of NOK 233 million, strong tangible results – continuous 105 million1 y-
Slide 4: Powering video everywhere with unique multi-platform video technology
Powering video everywhere with unique multi-platform video technology Patented transcoding architecture Run on any compute platform Centralized data processing Works in all environments, including self • Gives improved interoperability & hosted and sovereign clouds browser experience • Enables total
Slide 5: Strategic partnership with Poly powering Poly's new video infrastructure solutions
Strategic partnership with Poly powering Poly’s new video infrastructure solutions PrivateConnect Powered by Pexip • Poly|HP partners have been enabled to order Pexip through Poly • Several joint tradeshow events, with Pexip supporting the Poly CloudConnect booth Powered by Pexip • High activity lev
Slide 6: New products and features
New products and features SIP Guest Join. Launched direct calling for AI translation Join any Teams meeting. Microsoft Teams Rooms Even external ones. The Pexip and Nvidia partnership focuses on bringing the benefit of AI to secure deployments. Enable direct one-to-one calls between Pilot feature. C
Slide 7: Pexip combines AI functionality with best in class data privacy and control
Pexip combines AI functionality with best in class data privacy and control 7
Slide 8: Strengthening our position in both business areas
Strengthening our position in both business areas Connected Spaces Secure, customized solutions ARR: ARR: 60m 35m USD USD • Market and technology leadership strengthened • Pexip offers unique solution for self-hosted and private through 2023 cloud deployment–enabling complete privacy and security •
Slide 9: Secure solutions increasingly relevant
Secure solutions increasingly relevant “ Awareness around sovereignty and privacy for Norwegian National Security Authority published their Government data increasing updated security recommendations on May 9th • Increasing awareness across countries on secure and sovereign data services for public
Slide 10: Strong progress on our US Government Cloud solution after 3 months in operation
Strong progress on our US Government Cloud solution after 3 months in operation • Pexip’s US Government cloud solution was FedRamp authorized on April 19 and StateRamp authorized on June 19, 2023. • This allows US Government customers to use a Pexip provided cloud service as a supplement to our Self
Slide 11: Have returned to being a profitable company in 2023
Have returned to being a profitable company in 2023 Full Year Adj. EBITDA1 YTD NOK million Transformation highlights 100-150 • Have adapted cost base to 76 current revenues, giving 56 positive EBITDA and cash flow 43 • More focused strategy has enabled Pexip to strengthen differentiators in core mar
Slide 12: Sales update
Sales upda Jpexip[
Slide 13: Total ARR base at USD 99m in Q2 2023
Total ARR base at USD 99m in Q2 2023 Total ARR ARR split USDm Q2 2023 106.4 105.6 106.1 99.8 100.7 Self-hosted Software 99.6 98.3 98.7 92.7 47% 53% Pexip as-a-Service 93.0 93.8 96.2 92.7 93.2 92.7 94.1 85.8 78.0 APAC EMEA 8% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 53% 39% 2021 2021 2021 2022 2022 2022 2022 2023
Slide 14: Connected Spaces
Connected Spaces ARR USDm • Continue to innovate our leading technology, in particular on Teams interoperability, and have over the last quarters released several 61.5 61.3 61.2 new features such as direct calling and SIP guest join to strengthen 59.9 59.6 our offerings within Connected Spaces • In
Slide 15: Secure and custom solutions
Secure and custom solutions ARR • Secure and custom solutions growing 5% in Q2 and 14% y-o-y, USDm driven largely by strong upsell across several accounts in Secure 34.7 34.5 and Custom 32.1 32.7 31.4 • Video Innovation is driving the majority of growth in Q2, with 7% growth in the quarter, with inc
Slide 16: Breakdown of ARR development
Breakdown of ARR development USD million, quarter-over-quarter Connected spaces and legacy Secure and Custom +2.8% -1.8% -3.1% -2.1% +1.2% 5.0% -0.9% 5.4% 65.6 1.9 1.2 2.0 64.2 Quarterly net retention of 95% (96% excl. legacy) 34.5 32.7 0.4 1.7 0.3 Quarterly net retention of 104% Q1 2023 New Net Chu
Slide 17: Financial update
Financial up Jpexip[
Slide 18: Continued improvement in y-o-y EBITDA
Continued improvement Revenue in y-o-y EBITDA NOK million +19.5% 260.4 260.6 222.5 232.9 195.0 189.2 Positive revenue increase of 19% compared to Q2’22, of which 14 p.p. are driven by currency effects Q1 Q2 Q3 Q4 Q1 Q2 2022 2022 2022 2022 2023 2023 Continued positive EBITDA development, driven by re
Slide 19: Improvement in OPEX from cost reductions
Improvement in OPEX from cost reductions Quarterly OPEX development NOKm Salary and personnel expenses Reduction of 23% compared to 2022 290.3 excluding share option costs, and -1% from 26.8 250.2 Q1 2023. Some underlying cost reductions 248.5 229.5 from Q1, however, these were balanced out 59.5 5.3
Slide 20: NOK 42 million in positive cash flow in Q2
NOK 42 million in positive cash flow in Q2 – YTD positive NOK 88.4 million Cash flow bridge Q2 2023 NOKm +42 • Positive EBITDA excluding non-cash share- 3 9 508 based costs contributing to cash flow 0 32 466 9 8 • Improvement in net working capital a major contributor in Q2 • YTD, Pexip has NOK 10 m
Slide 21: Q2 2023 Financial results
Q2 2023 Financial results Profit and loss NOKm Q2 2023 Q2 2022 • 19% increase in year-on-year Q1 revenue, driven by currency exchange changes and stronger Software Revenue 232.9 195.0 and Software-as-Service revenues Cost of goods sold 24.4 29.1 • COGS is mainly relating to sale of Pexip-as-a-Servic
Slide 22: Outlook and 2023 targets
Outlook and 2023 targets Generally positive market outlook Target 2023 EBITDA of NOK 100-150 across the business areas million Pexip is a profitable business, with targets supported by the solid progress on the cost reduction program Poly partnership and Progress after Q2: On track FedRAMP/StateRAMP
Slide 23: Upcoming dates
Upcoming dates Q3 2023 Quarterly Presentation November 2, 2023 Q4 2023 Quarterly Presentation February 14, 2024 22
Slide 24: Q&A
Q&A Investor.pexip.com
Slide 25: Thank you for listening!
Thank you for listening! Investor.pexip.com
Slide 26: Breakdown of ARR development
Breakdown of ARR development Development in ARR portfolio last twelve months Churn development continue to be USDm impacted by the large US -3% Government contract that was not +11% -15% -7% renewed in Q3 2022. Excluding this customer, churn is somewhat up 3.0 compared to the previous quarter 106.1
Slide 27: High gross margins across the business areas
High gross margins across the business areas Gross profit by segment NOKm Q2 2023 Q2 2022 YoY dev. Revenue from Connected Spaces 154 147 5% • COGS are mainly related to Connected Spaces, however COGS of Connected Spaces 22 26 -15% both business areas with Gross Profit from Connected Spaces 132 122 9