Quarterly Presentation Q3 2023

November 2, 2023

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Q3 highlights and key areas of focus Revenue and ARR development Transformation continues Results and cash

• Successful transformation conducted with new leaner organization delivering improved results

• Further optimization executed in Q3, and continues going forward

Growth in Connected Spaces

Growth for Connected Spaces in Q3, benefiting from the HP|Poly partnership, the BlueJeans sunset and the launch of FedRamp
Announcing capital distribution policy of 50-100% of FCF to be approved by AGM in 2024

• Q3 revenue of NOK 215 million,

• Total ARR at USD 99.8 million, up

up 14% y-o-y

USD 1.1 million q-o-q

• Additional extraordinary dividend of NOK 0.5 per share to be recommended to AGM 2024

Beginning capital distribution On track on financial targets

NOK 494 million out of Q3

• Q3 Adjusted EBITDA of NOK 11

• Q3 cash flow of NOK -13 million, with a resulting cash position of

million, up 67 million¹ y-o-y

Flat to positive development in full year recurring revenues with 20%+ growth in ARR in Secure & custom spaces
NOK 100-150 million EBITDA
Full year cash-flow target of NOK 85-100 million

Pexip has a unique video technology platform

Patented transcoding architecture

Centralized data processing

Gives improved interoperability & browser experience
Enables AI applications

Run on any compute platform

Works in all environments, including self hosted and sovereign clouds

Enables total data privacy and control
Easy to customize

Flexible video technology that powers everything from business communication to ultra secure government meetings, doctor's appointments and court proceedings.

MISSION

To make seamless video communication available to all organizations regardless of technology platforms and security requirements

Pexip Connected Spaces Video meeting interoperability

When several video technologies need to work seamlessly together

Pexip Secure & custom Spaces Video meetings for self hosting or private clouds

When complete privacy and control over data is required

Selected partners Selected partners

Beneficial market trends underpin Pexip's growth ambitions

Pexip Connected Spaces

Video meeting interoperability

15% p.a. video conferencing device growth¹

Well-established and consolidating market for SIP video infrastructure
Pexip targets increasing market share through product innovation and having a focused position in the collaboration eco-system
The need for video interoperability is increasing as more video end-points are installed, with a clear opportunity for Pexip to take a leadership position also for service specific devices
First launch: Pexip Connect for Teams Rooms

Pexip Secure & Custom Spaces

Video meetings for self hosting or private clouds

30% p.a. private cloud revenue growth²

Increased Government awareness on data sovereignty and privacy expands market for secure video platforms, often as a complement to e.g., Teams
Industry analysts expects 30% growth in global private cloud market from 2023 to 2029, which in turn will drive demand for platforms that can operate in them
Clear expectations from customers/users on having highquality video collaboration tools available

Increased competitiveness with several new products and features

Teams-like layout deployed broadly on the Pexip SaaS platform

Version 33 giving a range of new Secure and Custom features

AI translation

The Pexip and Nvidia partnership focuses on bringing the benefit of AI to secure deployments.

Flexible custom layout generator
AI-powered noise removal
Breakout room management

Pilot feature: Co-developing live translation with selected large customers.

Enhanced product management with more distinct product packaging to improve go-to-market capabilities

Step-change in financial performance

Adjusted EBITDA¹ NOKm

Free Cash flow² NOKm

Sales update

Connected Spaces

Growth in Connected Spaces in Q3 following a negative development in the past quarters
BlueJeans sunset has triggered several customers to find new solutions
Positive feedback on SIP Point to Point for Microsoft Teams Rooms – opens up a new market opportunity for Pexip for the next generation of video interoperability
In Q3, Pexip signed several large customers in Connected spaces, including:
A major energy company
A major banking group
A major pharmaceutical company

Pexip Connect for Teams Rooms

First Fortune 500 win for the next generation of interoperability

Secure and custom solutions

Secure and custom solutions growing 3% in Q3 and 13% y-o-y, driven largely by strong upsell across several accounts in Secure and Custom
Secure spaces was the main source of growth in Q3, with 5% growth in Q3 and 23% y-o-y. Large wins include:
Secure meetings to a European energy company
Secure meetings to the armed forces in an Asian country
A custom video platform to a Service Provider in the collaboration space

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 video meeting platform for meetings that require an extra level of security. The application is an Outlook plug-in, alongside Teams.

Financial update

Total ARR base at USD 100m in Q3 2023

Booked Annual Recurring Revenue (ARR) development

Breakdown of ARR development

USD million, quarter-over-quarter

Continue solid net retention in Secure and Custom
New sales compensating for churn in Connected Spaces and Legacy as a whole due to connected spaces growth

Continued improvement in y-o-y EBITDA

Positive revenue increase of 14% compared to Q3'22, of which 4 p.p. are driven by currency effects
Continued positive EBITDA development despite seasonal lower revenues in Q3, driven by realized effects of the cost reduction program and revenue growth
Rightsizing program have given good results and a significantly lower cost base

Q3 OPEX base below NOK 180 million for Q3 2023

Quarterly OPEX development NOKm

Salary and personnel expenses

Reduction of 11% compared to Q3 2022 excluding share option costs. Approximately NOK 10 million reduction in salary cost in Q3 from holiday taken in July

Other Operating expenses

Positive development with a 43% reduction compared to Q3 2022, mainly from reductions in Sales and Marketing and external services, as well as high event costs in Q3 2022

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 noncash share-based costs contributing to cash flow
Neutral new working capital in Q3 compared to NOK 30 million gain year to date
CAPEX benefiting from NOK 4.75 million received government investment grants
YTD Pexip has a free cash flow of NOK 72 million from NOK 127 million in operational cash flow, negative 39 million in investing cash flow and negative 17 million in lease payments

Q3 2023 Financial results

Profit and loss

NOKm

	Q3 2023	Q3 2022	Y-o-Y
Revenue	215	189	26
Cost of goods sold	25	21	4
Gross Profit	190	168	22
Salary and personnel exp.	144	162	(18)
Other operating exp.	35	63	(28)
Adjusted EBITDA	11	(56)	67
Other gains and losses	(6)	(5)	(1)
EBITDA	5	(62)	67
D&A	27	23	4
Operating profit	(23)	(85)	62
Net financials	(3)	24	(27)
Profit/loss before income tax	(25)	(60)	35

14% increase in year-on-year revenue, driven by stronger Software and Software-as-Service revenues and currency
COGS is mainly relating to sale of Pexip-as-a-Service with the increase being related to increased usage as well as activation of key AI features
EBITDA excluding other gains and losses of NOK 11 million, NOK 67 million higher than in Q3 2022.
NOK 6 million in other gains and losses from restructuring supporting long-term cost reductions
Higher D&A in Q3 2023 compared to Q3 2023 in line with previous quarters.

Outlook and targets

Outlook and 2023 targets

Continued positive market outlook across the business areas

HP/Poly partnership, BlueJeans' exit, growth in video devices, growth in private clouds, geopolitical situation, and FedRAMP authorization are key drivers

Continue to be on track with EBITDA and revenue targets for the year

Q4 2023 ARR expected 100-103 million

Target 2023 EBITDA of NOK 100-150 million Progress after Q3: On track

Target 2023 free cash flow¹ of NOK 85-100 million Progress after Q3: On track with free cash flow of NOK 72

million YTD

Target flat to positive development in recurring revenues for FY 2023 Progress after Q3: On track

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 results going forward
Pexip is cash flow positive, has a solid cash position, no material interest-bearing debt and a positive market outlook
Based on this, the Board is introducing a new capital distribution policy and a dividend recommendation to AGM 2024

Recommended capital distribution policy by the Board

• Distribute 50-100% of free cash flow generated to shareholders as a dividend, with the concrete recommendation to be presented and approved by the AGM

2024 AGM recommendation

Ordinary dividend in line with the above policy
In addition, an extraordinary dividend of NOK 0.5 per share to be paid together with the ordinary dividend

Upcoming dates

Q4 2023 Quarterly Presentation Feb 14, 2024

2024 AGM

April 24, 2024

Q&A Investor.pexip.com

Thank you for listening!

Investor.pexip.com

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%
Gross Profit from Connected Spaces	137	135	2%
Gross margin Connected Spaces	86%	88%	-2 p.p.

	Q2 2023	Q2 2022	YoY dev.
Revenue from secure, custom solutions	56	36	57%
COGS of secure, custom solutions	3	2	29%
Gross Profit from secure, custom solutions	53	34	58%
Gross margin secure, custom solutions	95%	94%	1 p.p.

Stable development in Connected Spaces, solid revenue and gross profit growth in Secure & Custom
COGS is mainly related to Connected Spaces

AI Terminal

Pexip Holding

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