Slide 1: Quarterly Presentation Q4 2023
Quarterly Presentation Q4 2023 February 14, 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: Q4 highlights
Q4 highlights Strong development in Solid Q4 results Connected Spaces Delivered on 2023 targets • Q4 revenue of NOK 285 million, • USD 2.7 million in ARR growth in • ARR growth of 3% (7% excluding up 10% y-o-y the quarter for Connected Spaces legacy) • Total ARR at USD 102.8 million, • Benefiting fr
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: Connected Spaces market opportunity
Connected Spaces market opportunity Consolidating market for SIP interop Emerging market for service-attached interop fueled by 15% p.a. growth in video endpoint sales next five years1 SIP endpoints Service-attached endpoints (MTRs, Zoom Rooms etc) Market for interop solutions is growing Installed b
Slide 7: On a journey to connect any meeting room to any meeting
On a journey to connect any meeting room to any meeting Rooms Meeting Rooms Meeting Rooms Meeting Rooms Meeting SIP end-points ROOMS MEETINGS
Slide 8: Strengthening Pexip Connect for Teams Rooms ecosystem with Lenovo partnership
Strengthening Pexip Connect for Teams Rooms ecosystem with Lenovo partnership “We are excited to collaborate with Pexip to enhance the capabilities of our Teams Rooms. With the capabilities provided by Pexip, customers can have a more complete solution – making it an attractive and preferred option
Slide 9: 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 10: Secure & Custom market opportunity
Secure & Custom market opportunity Features • Analysts expect 30% growth in private clouds 137+ countries have enacted Rich • some form of data protection and sovereignty laws • 50% of European CXOs see data sovereignty as a top issue • 44% of European enterprises plan to move to sovereign cloud in
Slide 11: Complementing Teams meetings with Pexip Secure Meetings
Complementing Teams meetings with Pexip Secure Meetings European Country Government Pexip Secure Meetings as a complementary video meeting platform for meetings that require ABC ABC an extra level of security. The Secure Secure application is an Outlook plug-in, 1 2 alongside Teams. GKN Aerospace Ne
Slide 12: Step-change in financial performance
Step-change in financial performance Total ARR Adjusted EBITDA1 Free Cash flow2 USDm NOKm, last 12 months NOKm +1.1 +3.0 +297.3 +366.9 -1.3 +0.4 99.6 99.8 102.8 113.3 104.7 98.3 98.7 75.8 9.0 93,2 94,1 96,0 99,4 92,7 -97.4 -184.0 -262.2 Q4 Q1 Q2 Q3 Q4 2022 2023 Q4 Q1 Q2 Q3 Q4 2022 2023 2023 2023 202
Slide 13: 2023 target achievement
2023 target achievement Target 2023 EBITDA of NOK 100-150 NOK 113 million in EBITDA adjusted for million other gains and losses (restructuring) Target 2023 free cash flow1 of NOK 85- NOK 105 million in free cash flow 100 million Target flat to positive development in 3% growth in ARR to USD 102.8 mi
Slide 14: Sales update
Sales upda Jpexip[
Slide 15: Connected Spaces
Connected Spaces • Growth in Connected Spaces in Q4 benefiting from improved product differentiation, increasing momentum in Poly|HP partnership and BlueJeans sunsetting their CVI solution ARR USDm • All regions contributing positively to Connected Spaces growth 61,2 63,1 • Positive feedback on SIP
Slide 16: Big Four Audit and Consulting firm
Big Four Audit and Consulting firm • Complex internal UC setup using both Google Meet and Microsoft Teams internally • Wide range of video systems internally • High number of interactions with clients using a range of UC tools • Pexip is providing the full Pexip Connect offering, with interop to Tea
Slide 17: Secure and custom solutions
Secure and custom solutions ARR USDm • Secure and custom solutions growing 2.4% in Q4 and 13% y-o-y, driven largely by strong upsell across several accounts in Secure 35.5 36.3 34.5 and Custom 32.1 32.7 • Secure spaces was the main source of growth, with 22% growth y- 11,8 12,4 13,4 o-y. Large wins
Slide 18: Seeing solid traction in the defense space
Seeing solid traction in the defense space Mission Defence classified Deployed video partner Collaboration meetings tools collaboration for development For SECRET and above, its 100% Wearables, mobile and Federate & plan with partner Protect advanced engineering on prem, or private cloud. applicatio
Slide 19: Launched Video platform as a Service (VPaaS) beta
Launched Video platform as a Service (VPaaS) beta Unique value proposition built on core Pexip strengths Private and compliant • No Personal Identifiable Information is obtained or stored on the service at any time • You choose where your tenant operates without sacrificing features or functions • B
Slide 20: Financial update
Financial up Jpexip[
Slide 21: Total ARR base at USD 103m in Q4 2023
Total ARR base at USD 103m in Q4 2023 Total ARR Legacy ARR split USDm Underlying ARR Q4 2023 106.4 105.6 106.1 100.7 102.8 Self-hosted Software 99.6 98.3 98.7 99.8 48% 52% Pexip as-a-Service 96,2 94,1 96,0 99,4 93,0 93,8 92,7 93,2 92,7 APAC EMEA 9% 51% Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 41% 2021 2022 2022 2
Slide 22: Breakdown of ARR development
Breakdown of ARR development USD million, quarter-over-quarter Connected spaces and legacy Secure and Custom +6.2% 1.5% -4.3% 4.4% +3.3% 0.1% -1.0% 2.4% 64.2 66.4 4.0 1.0 2.8 Quarterly net retention of 97% (98% excl legacy) 35,5 36,3 1.2 0.0 0.4 Quarterly net retention of 99% Q3 2023 New Net Upsell
Slide 23: Continued improvement in revenue and EBITDA
Continued improvement in revenue and EBITDA Revenue NOK million +9.5% 260.4 260.6 285.2 222.5 232.9 214.9 195.0 189.2 Positive revenue increase of 10% compared to Q4’22 – Strong revenue development despite delivering Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2022 2022 2022 2022 2023 2023 2023 2023 NOK 25 million less
Slide 24: Q4 2023 OPEX base 10% below Q4 2022
Q4 2023 OPEX base 10% below Q4 2022 Quarterly OPEX development NOKm 263.5 248.5 Salary and personnel expenses -10% 59.5 224.2 221.0 Stable salary and personnel expenses 60.4 204.5 199.8 197.9 10.9 compared to Q1/Q2, with somewhat lower 6.6 62.7 55.0 179.1 45.0 42.8 36.7 fixed salary and higher varia
Slide 25: NOK 28 million in positive cash flow in Q4
NOK 28 million in positive cash flow in Q4 – 2023 free cash flow of NOK 105 million Cash flow bridge Q4 2023 NOKm • Positive EBITDA excluding share based compensation costs contributing positively +28 11 12 to Q4 cash flow 12 523 5 2 5 55 494 • Seasonal negative development on working capital due to
Slide 26: Q4 2023 Financial results
Q4 2023 Financial results Profit and loss NOKm Q4 2023 Q4 2022 Y-o-Y • 14% increase in year-on-year revenue, driven by Revenue 285 260 25 stronger Software and Software-as-Service revenues and currency Cost of goods sold 28 18 10 Gross Profit 257 243 14 • COGS is mainly relating to sale of Pexip-as-
Slide 27: FY 2023 Financial results
FY 2023 Financial results Profit and loss NOKm FY 2023 FY 2022 Y-o-Y • For FY 2023 revenues are up 15% or NOK 127 million Revenue 994 867 127 compared to 2022 Cost of goods sold 99 94 5 • COGS overall in line with last year, benefiting from Gross Profit 895 773 121 improved operational efficiency bu
Slide 28: Outlook and targets
Outlook and targets 28
Slide 29: Updated financial targets and current 2024 outlook
Updated financial targets and current 2024 outlook 2023 achievement Current 2024 outlook Mid-term targets • 3% ARR growth • 5 to 10% ARR growth Consistently deliver: (7% excluding legacy) • 13-18% EBITDA1 • Above 10% ARR growth • 11% EBITDA1 • Above 20% EBITDA1 1) Adjusted for other gains and losses
Slide 30: Market outlook
Market outlook • Continued positive market outlook across the business areas Current 2024 outlook • Key drivers for Connected Spaces is the Hybrid • 5 to 10% ARR growth work mode, the HP|Poly partnership, BlueJeans’ exit, Pexip’s unique product and FedRAMP • 13-18% EBITDA1 authorization in this spac
Slide 31: Will recommend a NOK 1.1 per share dividend to AGM 2024
Will recommend a NOK 1.1 per share dividend to AGM 2024 Introduced a capital distribution policy • Distribute 50-100% of free cash 2023 dividend recommendation of NOK 1.1 per share flow generated to shareholders as • NOK 0.6 dividend per share as an ordinary divided a dividend, with the concrete rec
Slide 32: Upcoming dates
Upcoming dates Q1 2024 Quarterly Presentation May 6, 2024 2024 AGM April 12, 2024 32
Slide 33: Q&A
Q&A Investor.pexip.com
Slide 34: Thank you for listening!
Thank you for listening! Investor.pexip.com
Slide 35: High gross margins across the business areas
High gross margins across the business areas Gross profit by segment NOKm Q4 2023 Q4 2022 YoY dev. Revenue from Connected Spaces 184 168 10% COGS of Connected Spaces 24 18 32% • 10% and 9% revenue development in the two Gross Profit from Connected Spaces 160 150 7% business areas Gross margin Connec