Pexip Holding Asa · OSL:PEXIP
Pexip Holding Asa — Pexip Hldg — Q3 2024 Earnings Presentation
31 slides from Pexip Holding Asa's earnings presentation, Nov 7, 2024
Slide 1: Quarterly Presentation Q3 2024
Quarterly Presentation Q3 2024 November 7, 2024
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: Pexip at-a-glance
Pexip at-a-glance Selected Customers 2011 founded 286 employees across 25 countries Specialist video conferencing player Mission-critical, enterprise-grade, secure video conferencing provider Software only Selected Technology partners Develop and deliver software and SaaS Unique tech partnerships Pa
Slide 4: Q3 2024 highlights
Q3 2024 highlights • Continued improved ARR growth +2.4m MUSD 109.5 EoQ3 ARR Q-o-Q • Double-digit growth from both business areas • Improved EBITDA1 despite one-off items of negative NOK 15 million • Strong free cash flow, up NOK 18 million y-o-y 18.1m MNOK 178 LTM Adj. EBITDA1 Q3 2024 • Strong star
Slide 5: Continued growth and further improved profitability
Continued growth and further improved profitability Total ARR Adjusted EBITDA1 Free Cash flow2 USDm NOKm, Last twelve months NOKm, Last twelve months +2.3 +2.5 +3.0 +2.0 107.1 109.5 209 102.8 104.8 99.8 191 178 170 164 143 113 105 105.0 107.7 96.0 99.4 102.0 76 69 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 Q3 Q4
Slide 6: Pexip's two business areas
Pexip’s two business areas Pexip Connected Spaces Pexip Secure & Custom Spaces Video meeting room interoperability Video meetings that are self-hosted on-premises or in a private cloud 6
Slide 7: Our vision is to connect any meeting room to any meeting
Connected Spaces Our vision is to connect any meeting room to any meeting One Touch to Join for Teams Rooms launched by Microsoft Nov 4th Rooms Meeting Rooms Meeting Rooms Meeting Launched by RingCentral in Q3 Rooms Meeting SIP end- points rooms meetings 7
Slide 8: Strong market position in a growing market
Connected Spaces Strong market position in a growing market Video device growth expected to drive TAM growth Pexip with leading technology solutions Unmatched user experience Work with all major vendors and cover all relevant use cases +15% 2022-2027 Video endpoints sold p.a. Y-o-Y Full hosting flex
Slide 9: Pexip is Microsoft ISV Partner of the Year 2024
Connected Spaces Pexip is Microsoft ISV Partner of the Year 2024 • Continue to be recognized by Microsoft for our exceptional results with a new standard for success. • Azure Marketplace Global Partner Finalist • Independent software vendor Partner of the year 2024 Insert source (optional) 9
Slide 10: Complementary video services cater to specific customers' security & privacy requirements
Secure & Custom Spaces Complementary video services cater to specific customers’ security & privacy requirements Private Cloud Government Cloud Global SaaS Services Sovereign Cloud On- premises Air- gapped 10
Slide 11: AI for Secure Meetings general available in Q4 through NVIDIA partnership
Secure & Custom Spaces AI for Secure Meetings general available in Q4 through NVIDIA partnership • Private deployment with complete data control • Customer-specific language libraries • Built on NVIDIA AI models 11
Slide 12: Sales update
Sales upda Jpexip[
Slide 13: Connected Spaces
Connected Spaces Strong first full quarter with the new +1.5m ARR change Q-o-Q USD Connect for Zoom Rooms product Closed several Fortune 500 accounts with strong momentum in particular 66.8m ARR USD End of Q3 2024 in US Enterprise Strong uptake of our FedRAMP 11% Y-o-Y growth Q3 2024 authorized clou
Slide 14: Customer use-case: HSBC
Connected Spaces Customer use-case: HSBC PRODUCT CONNECT FOR ZOOM ROOMS Use case Pexip was selected by HSBC to enable their ~4,000 Zoom Rooms to join Teams meetings with a high-quality experience. HSBC are extensively using Zoom and Teams internally and when meeting external suppliers and customers.
Slide 15: Secure and Custom Spaces
Secure and Custom Spaces Secure Meetings continue to be the +1.3m ARR change Q-o-Q USD main growth driver Closed first Virtual Courts sale ARR USD 41.0m End of Q3 2024 outside of Europe Increased upsales across several 15% Y-o-Y growth Q3 2024 key accounts in Q3 2024 15
Slide 16: Customer use-case: Large European Naval Defence Force
Secure and Custom Spaces Customer use-case: Large European Naval Defence Force PRODUCT SECURE MEETINGS Use case: Multi-Nation Defence Collaboration • Operate across multiple domains with the highest level of security • Enabling quick collaboration and fast decision- making Key winning USPs • Pexip i
Slide 17: Financial update
Financial up Jpexip[
Slide 18: Total ARR base at USD 110 million in Q3 2024
Total ARR base at USD 110 million in Q3 2024 Total ARR Legacy ARR split USD million Underlying ARR Self-hosted Software +10% 107.1 109.5 102.8 104.8 99.8 +12% 48% 52% Pexip as-a-Service 102.0 105.0 107.7 96.0 99.4 APAC EMEA 9% 50% 41% Q3 Q4 Q1 Q2 Q3 2024 2023 2023 2024 2024 Americas Booked Annual Re
Slide 19: Growth in both business areas
Growth in both business areas USD million, quarter-over-quarter Connected spaces and legacy Secure and Custom 6.4% -1.6% -3.0% 1.8% 3.6% 1.8% -2.2% 3.2% 67.4 4.3 1.1 2.1 68.6 Quarterly net retention of 95% 39.7 41.0 1.4 0.7 0.9 Quarterly net retention of 100% Q2 2024 New Net Upsell Churn Q3 2024 Q2
Slide 20: Continued revenue growth driven by SaaS
Continued revenue growth driven by SaaS Revenue Adjusted EBITDA1 NOK million NOK million (margin) Software SaaS Quarterly revenue increase of 6% y-o-y 8 6% – Strong growth of 22% on Software as 18 228 a Service, reduction of 13% on 215 (8%) 11 Software Quarterly 88 101 (5%) – Mix shift towards SaaS
Slide 21: Q3 EBITDA impacted by a few notable elements
Q3 EBITDA impacted by a few notable elements Q3 2024 EBITDA bridge NOK million 33 Increase in share-option costs • Share price growth during Q3 2024 of NOK 9.8 per 7 share • This impacts cost accruals for employer tax on share options, driving a NOK 8 million y-o-y increase in share 8 option costs f
Slide 22: High conversion of revenue growth to EBITDA in 2024
High conversion of revenue growth to EBITDA in 2024 Revenue and gross margin EBITDA excl. other gains and losses NOK million NOK million +78 (+11%) 786 +64 708 79 (7 p.p.) COGS 71 +70 119 707 Gross 638 (90%) 54 margin (90%) YTD 2023 YTD 2024 YTD 2023 YTD 2024 Note: Q1-Q3 Converted 83%1 of revenue gr
Slide 23: Stable operating expenses outside share option related costs
Stable operating expenses outside share option related costs Quarterly OPEX development NOK million Salary and personnel expenses 204.5 199.8 197.9 200.7 202.5 NOK 5 million reduction y-o-y in fixed salary 179.1 185.6 in Q3 and an increase in variable salary of 45.0 42.8 36.7 39.1 38.7 34.6 NOK 4 mi
Slide 24: NOK 8 million in free cash flow in Q3
NOK 8 million in free cash flow in Q3 – NOK 18 million better than Q3 2023 Cash flow bridge Q3 2024 NOK million 11 22 3 594 1 0 594 • Positive EBITDA main driver of Q3 587 8 operating cash flow • NOK 11 million investment cash flow (+8 million y-o-y), due to delayed reception of outstanding R&D tax
Slide 25: Q3 2024 Financial results
Q3 2024 Financial results Profit and loss NOK million Q3 2024 Q3 2023 Y-o-Y • 6% increase in year-on-year revenue, negatively impacted by higher SaaS mix (timing effect) Revenue 228 215 14 Cost of goods sold 25 25 0 • COGS is mainly relating to sale of Pexip-as-a-Service and is stable despite revenu
Slide 26: Outlook and targets
Outlook and targets 26
Slide 27: Outlook
Outlook 2024 outlook • Continued positive market outlook across the • ARR of USD 111-114m business areas • 8-11% y-o-y • Strong market position and industry partnerships are • 17-20% EBITDA1 expected to continue to drive growth 2025+ targets • End Q4 2024 ARR expected 111-114 USD millions Consistent
Slide 28: Upcoming dates
Upcoming dates Q4 2024 Quarterly Presentation February 13th , 2025 28
Slide 29: Q&A
Q&A Investor.pexip.com
Slide 30: BACKUP
BACKUP Supporting materials
Slide 31: Summary of key figures
Summary of key figures KPI Unit Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Y-o-y Q-o-Q Comments Q3 2024 ARR ARR Connected Spaces MUSD 60.5 63.1 64.2 65.3 66.8 6.3 1.5 • Delta ARR Q3 of 2.4 MUSD, with good contibutions Secure & Custom MUSD 35.5 36.3 37.7 39.7 41.0 5.5 1.3 across Connected Spaces and Sec