Pexip Holding Asa · OSL:PEXIP
Pexip Holding Asa — Q3 2023 Earnings Presentation
28 slides from Pexip Holding Asa's earnings presentation, Nov 2, 2023
Slide 1: Quarterly Presentation Q3 2023
Quarterly Presentation Q3 2023 November 2, 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: Q3 highlights and key areas of focus
Q3 highlights and key areas of focus Transformation continues Revenue and ARR development Results and cash • Successful transformation conducted • Q3 Adjusted EBITDA of NOK 11 • Q3 revenue of NOK 215 million, with new leaner organization million, up 67 million1 y-o-y up 14% y-o-y delivering improved
Slide 4: Pexip has a unique video technology platform
Pexip has a unique video technology platform 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 data privacy and control
Slide 5: Mission: seamless video communication for all organizations
MISSION To make seamless video communication available to all organizations regardless of technology platforms and security requirements Pexip Connected Spaces Pexip Secure & custom Spaces Video meeting interoperability Video meetings for self hosting or private clouds When several video technologie
Slide 6: Beneficial market trends underpin Pexip's growth ambitions
Beneficial market trends underpin Pexip’s growth ambitions Pexip Connected Spaces Pexip Secure & Custom Spaces Video meeting interoperability Video meetings for self hosting or private clouds 15% p.a. video 30% p.a. private conferencing cloud revenue device growth1 growth2 • Well-established and con
Slide 7: Increased competitiveness with several new products and features
Increased competitiveness with several new products and features Teams-like layout deployed Version 33 giving a range of new AI translation broadly on the Pexip SaaS Secure and Custom features platform The Pexip and Nvidia partnership focuses on bringing the benefit of AI to secure deployments. • Fl
Slide 8: Enhanced product management with more distinct product packaging
Enhanced product management with more distinct product packaging to improve go-to-market capabilities Multiplatform meeting room interoperability: PEXIP CONNECT Secure and Custom meetings PEXIP SECURE MEETINGS PEXIP VIDEO PLATFORM PEXIP ENGAGE 8
Slide 9: Step-change in financial performance
Step-change in financial performance Total ARR Adjusted EBITDA1 Free Cash flow2 USDm NOKm NOKm -1.2 -1.3 +0.4 +1.1 +66.8 +333.8 100.7 99.6 98.3 98.7 99.8 35.1 71.5 21.7 7.7 10.6 92.7 93.2 92.7 94.1 96.0 -56.2 -262.2 Q3 Q4 Q1 Q2 Q3 YTD 2022 YTD 2023 Q3 Q4 Q1 Q2 Q3 2022 2022 2023 2023 2023 2022 2022 2
Slide 10: Sales update
Sales upda Jpexip[
Slide 11: Connected Spaces
Connected Spaces • Growth in Connected Spaces in Q3 following a negative development in the past quarters ARR USDm • BlueJeans sunset has triggered several customers to find new solutions 61.3 61.2 59.9 59.6 60.4 • Positive feedback on SIP Point to Point for Microsoft Teams Rooms – opens up a new ma
Slide 12: First Fortune 500 win for the next generation of interoperability
Pexip Connect for Teams Rooms First Fortune 500 win for the next generation of interoperability SIP/H.323 Systems SIP enabled Cloud 1 P2P Teams Room Device On-prem / Specialty Services Organization with Teams Rooms Pro requires Pexip Teams Room SIP/H.323 Calling plan license 12
Slide 13: Secure and custom solutions
Secure and custom solutions ARR • Secure and custom solutions growing 3% in Q3 and 13% y-o-y, USDm driven largely by strong upsell across several accounts in Secure 34.5 35.5 and Custom 32.1 32.7 31.4 • Secure spaces was the main source of growth in Q3, with 5% 11.8 12.4 growth in Q3 and 23% y-o-y.
Slide 14: Win with GKN Aerospace complementing their Teams meeting solution
Pexip Secure meetings for Defense Win with with GKN Aerospace complementing their Teams meeting solution • Need for a secure on-premises video platform with full opportunity to audit access to information to comply with customer regulation demands • Adopting Pexip Secure Meetings as a complementary
Slide 15: Financial update
Financial up Jpexip[
Slide 16: Total ARR base at USD 100m in Q3 2023
Total ARR base at USD 100m in Q3 2023 Total ARR ARR split USDm Q3 2023 106.4 105.6 106.1 100.7 Self-hosted Software 99.8 99.6 98.3 98.7 99.8 48% 52% Pexip as-a-Service 93.0 93.8 96.2 92.7 93.2 92.7 94.1 96.0 85.8 APAC EMEA 9% 52% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 40% 2021 2021 2022 2022 2022 2022 2023 2023
Slide 17: Breakdown of ARR development
Breakdown of ARR development USD million, quarter-over-quarter Connected spaces and legacy Secure and Custom +2.8% 0.6% -3.3% 0.1% +1.2% 2.4% -0.5% 3.0% 64.2 64.2 1.7 0.4 2.1 Quarterly net retention of 97% (99% excl legacy) 34.5 0.2 35.5 0.4 0.8 Quarterly net retention of 102% Q2 2023 New Net Churn
Slide 18: Continued improvement in y-o-y EBITDA
Continued improvement in y-o-y EBITDA Revenue NOK million +13.5% 260.4 260.6 222.5 232.9 214.9 195.0 189.2 Positive revenue increase of 14% compared to Q3’22, of which 4 p.p. are driven by currency effects Q1 Q2 Q3 Q4 Q1 Q2 Q3 2022 2022 2022 2022 2023 2023 2023 Continued positive EBITDA development
Slide 19: Q3 OPEX base below NOK 180 million for Q3 2023
Q3 OPEX base below NOK 180 million for Q3 2023 Quarterly OPEX development NOKm 263.5 248.5 Salary and personnel expenses 59.5 224.2 221.0 Reduction of 11% compared to Q3 2022 60.4 204.5 199.8 10.9 excluding share option costs. 6.6 62.7 55.0 179.1 45.0 42.8 Approximately NOK 10 million reduction in 9
Slide 20: NOK 13 million in negative cash flow in Q3
NOK 13 million in negative cash flow in Q3 – YTD free cash flow of NOK 72 million Cash flow bridge Q3 2023 NOKm • Continued positive EBITDA excluding non- -13 cash share-based costs contributing to cash 3 flow 8 3 508 5 5 10 5 494 • Neutral new working capital in Q3 compared to NOK 30 million gain y
Slide 21: Q3 2023 Financial results
Q3 2023 Financial results Profit and loss NOKm Q3 2023 Q3 2022 Y-o-Y • 14% increase in year-on-year revenue, driven by Revenue 215 189 26 stronger Software and Software-as-Service revenues and currency Cost of goods sold 25 21 4 Gross Profit 190 168 22 • COGS is mainly relating to sale of Pexip-as-a
Slide 22: Outlook and targets
Outlook and targets 22
Slide 23: Outlook and 2023 targets
Outlook and 2023 targets Continued positive market outlook Target 2023 EBITDA of NOK 100-150 across the business areas million Progress after Q3: On track HP/Poly partnership, BlueJeans’ exit, growth in video devices, growth in Target 2023 free cash flow1 of NOK 85-100 private clouds, geopolitical s
Slide 24: Introducing a new capital distribution policy and recommend dividend to AGM 2024
Introducing a new capital distribution policy and recommend dividend to AGM 2024 • Pexip has successfully executed a change in strategy, and will execute on a strategy of growing both top-line and bottom-line Recommended capital distribution policy by the Board results going forward • Distribute 50-
Slide 25: Upcoming dates
Upcoming dates Q4 2023 Quarterly Presentation Feb 14, 2024 2024 AGM April 24, 2024 25
Slide 26: Q&A
Q&A Investor.pexip.com
Slide 27: Thank you for listening!
Thank you for listening! Investor.pexip.com
Slide 28: High gross margins across the business areas
High gross margins across the business areas Gross profit by segment NOKm Q3 2023 Q3 2022 YoY dev. Revenue from Connected Spaces 159 154 4% COGS of Connected Spaces 22 19 18% • Stable development in Connected Spaces, solid Gross Profit from Connected Spaces 137 135 2% revenue and gross profit Gross