Quarterly Presentation Q1 2023

May 4, 2023

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 representative of the Company and/or persons to whom these materials have been provided directly by an authorized representative of the Company (the "Recipients"). For purposes of this notice, "materials" means this presentation, its contents and appendices and any part thereof, any oral presentation and any question or answer session during or after or in relation to any of the foregoing.

The materials are for information purposes only, and do not constitute or form part of any offer, invitation or recommendation to purchase, sell or subscribe for any securities in any jurisdiction and neither the issue of the information nor anything contained herein shall form the basis of or be relied upon in connection with, or act as an inducement to enter into, any investment activity. The materials comprise a general summary of certain matters in connection with the Group, and do not purport to contain all of the information that any recipient may require to make an investment decision. Each recipient should seek its own independent advice in relation to any financial, legal, tax, accounting or other specialist advice.

No representation or warranty (expressed or implied) is made as to any information contained herein, and no liability whatsoever is accepted as to any errors, omissions or misstatements. Accordingly, the Company or any such person's officers or employees accepts any liability whatsoever arising directly or indirectly from the use of the materials.

The materials may contain certain forward-looking statements relating to the business, financial performance and results of the Company and/or the industry in which it operates. Forward-looking statements concern future circumstances and results and other statements that are not historical facts, sometimes identified by the words "believes", "expects", "predicts", "intends", "projects", "plans", "estimates", "aims", "foresees", "anticipates", "targets", and similar expressions. Any such forward-looking statements are solely opinions and forecasts which are subject to risks, uncertainties and other factors that may cause actual events to differ materially from any anticipated development. No liability for such statements, or any obligation to update any such statements or to conform such statements to actual results, is assumed.

These materials are not intended for distribution to, or use by, any person in any jurisdiction where such distribution or use would be contrary to local laws or regulations, and by accepting these materials, each recipient confirms that it is able to receive them without contravention of an unfulfilled registration requirements or other legal or regulatory restrictions in the jurisdiction in which such recipients resides or conducts business.

This presentation and related materials speaks only as of the date set out on the cover, and the views expressed are subject to change based on a number of factors. The Company does not undertake any obligation to amend, correct or update the materials or to provide any additional information about any matters described herein.

Q1 highlights and key areas of focus

Transformation underway	Revenue and ARR development	Results and cash
Company transformation is • starting to deliver tangible results, on both profitability and cash flow Continue to drive focus on core • markets to enhance technology leadership in these	Q1 revenue of NOK 261 million, • up 17% y-o-y Total ARR at USD 98.3 million, • down 7% y-o-y	EBITDA of NOK 35 million, up • 87 million y-o-y Cash flow of NOK 47 million, • with a cash position of NOK 466 million out of Q1
New partnership with Poly	FedRamp Authorized	2023 Financial targets
Pexip has entered into a • strategic partnership with Poly, a major player in the collaboration market The partnership will positively • impact both Secure Spaces and Connected spaces	Pexip is FedRamp Authorized • This will enable US Federal • customers to more easily deploy Pexip technology through Pexip's Government Cloud	20%+ growth in ARR in Secure • Spaces and Video Innovation Flat to positive development in • revenues NOK 100-150 million EBITDA • Min NOK 40-60 million free cash • flow excluding one-offs

Powering video everywhere with unique multi-platform video technology

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.

Strategic partnership with Poly powering Poly's new video infrastructure solutions

CloudConnect

FedConnect

Offerings will be available through Poly's sales channels, improving Pexip's market reach

"We're thrilled to work with Pexip, a leading player in the market. This collaboration enables us to deliver secure private video communications via on-premise and cloud-based solutions, catering especially to security-conscious organizations."

- Chris Moss, Product and Portfolio Management, HP Hybrid Systems

Pexip Government Cloud Achieves FedRAMP® Authorization

Pexip achieved official FedRAMP approved status in April 2023 and now offers a FedRAMP Authorized solution for Microsoft Teams Cloud Video Interop (CVI). This makes it easy for federal agencies to join a Microsoft Teams meeting from the office – all in a secure, compliant way.

"Our FedRAMP Authorized platform offers a pathway for Pexip customers and federal government agencies to future-proof their video investments and securely unite their hybrid workforce. Already trusted by agencies including the VA, NASA, EPA, and the US Air Force, FedRAMP Authorization now enables even more agencies to access Pexip's solution."

Peter McCarthy, VP, Public Sector, Pexip

Several new products and features launched in Q1

Introducing SIP Guest Join. Join any Teams meeting. Even external ones.

Pexip now available on Genesys AppFoundry

Pexip partners with RealWear to enable secure video for frontline workers Version 31 of Pexip Infinity

End-to-end encryption
In-conference security classifications indicators
Personalized apps and branding
Improved Microsoft Teams Cloud Video Interop (CVI)
Improved Google Meet interop

Strengthening our position in both business areas

Market and technology leadership strengthened through Q1
Interoperable Multi-platform product for meeting rooms well received in the market
FedRAMP and Poly partnership will amplify position and increase market share

Pexip offers unique solution for self hosted and private cloud deployment–enabling complete privacy and security
Technology alliances with Genesys, Realwear, etc broadens solution space
Poly partnership will increase market share within the secure segment

Turning around to a profitable company in 2023

Transformation highlights

Have adapted cost base to current revenues, giving positive EBITDA and cash flow
More focused strategy has enabled Pexip to strengthen differentiators in core markets, and strengthen strategic partnerships
On track to reach 2023 targets

Sales update

Total ARR base at USD 98m in Q1 2023

Breakdown of ARR development

Development in ARR portfolio last twelve months USDm

Churn development continue to be impacted by the large US Government contract that were not renewed in Q3 2022. Excluding this customer, churn is somewhat up compared to the previous quarter (USD 10.6 million compared to USD 8.6 million out of Q4 2022)
Legacy continues to decline in line with expectation, driving both churn and downsell
Downsell is also impacted by a rightsizing of capacity following the pandemic
Increased list prices from Jan 1, 2023 will continue to have a positive impact on net upsell through 2023

Connected Spaces

Continuous innovation ongoing to increase technology leadership in Connected Spaces
Continue to win major customers with our leading technology, in particular on Teams interoperability
- Large US federal government agency Social Security Administration (SSA)
- Major US based Aerospace and Defense Systems Integration Company
- Announced new strategic partnership with Poly

Secure and custom solutions

Continued momentum for our Secure Collaboration products with recurring revenues in Secure Spaces growing 5% in Q1, and underlying y-o-y growth of 69%
Increased awareness on cyber vulnerability and privacy gives Pexip an attractive position as a leading on-premise focused video collaboration provider
Stable ARR in Video Innovation, with ARR of USD 21.2 million.
Video innovation is still an immature market however with large potential across several use cases and clear signals of increased market traction in attractive niches
In Q1, we had several large renewals within secure and custom solutions. In addition, we had several new customers added this quarter, including:
- A new service provider within TeleHealth
- A new Swedish government agency within Secure Spaces

Financial update

Clear progress of return to profitability

Positive revenue increase of 17% compared to Q1'22, of which 11 p.p. are driven by currency effects
Continued positive EBITDA development, driven by realized effects of the cost reduction program and revenue growth
Rightsizing program have given good results and we see clear signs of a healthy cost base and clear path to profitability and positive cash flow

High gross margins across the business areas

Gross profit by segment

NOKm	Q1 2023	Q1 2022	YoY dev.
Revenue from Connected Spaces	158	149	6%
COGS of Connected Spaces	18	21	-14%
Gross Profit from Connected Spaces	139	128	9%
Gross margin Connected Spaces	88%	86%	3 p.p.

	Q1 2023	Q1 2022	YoY dev.
Revenue from secure, custom solutions	103	73	40%
COGS of secure, custom solutions	3	4	-32%
Gross Profit from secure, custom solutions	100	69	45%
Gross margin secure, custom solutions	97%	94%	3 p.p.

COGS are mainly related to Connected Spaces, however both business areas with high gross margins
The gross margin in both areas are improving compared to Q1 2022, mainly due to underlying efficiency improvements

Improvement in OPEX from cost reductions

Quarterly OPEX development NOKm

Salary and personnel expenses

Decrease in salary and personnel driven by reduction in employees, although not seeing the full effect in Q1 from the Q4 downsizing

Other Operating expenses

Positive development with a 26% reduction compared to Q1 2022, mainly from reductions in Sales and Marketing, software and external services

Currency effects

• Approximately 5 p.p. cost increase driven by currency effects

NOK 47 million in positive cash flow in Q1

Cash flow bridge Q1 2023 NOKm

Positive EBITDA, net working capital and exchange gains from receiving payments at a more favourable exchange rate main positive contributors to positive cash flow
Negative NOK 15 million in severance payments and NOK 10.5 million in acquisition earnout, both of which are nonrecurring in nature

Q1 2023 Financial results

Profit and loss

NOKm

	Q1 2023	Q1 2022
Revenue	260.6	222.5
Cost of goods sold	21.3	25.8
Gross Profit	239.3	196.7
Salary and personnel exp.	159.6	188.1
Other operating exp.	45.0	61.3
Other gains and losses	-0.3	0.0
EBITDA	35.1	-51.8
D&A	29.1	23.3
Operating profit	6.0	-75.1
Net financial income / (expenses)	25.9	-7.5
Profit before income tax	31.9	-82.6

17% increase in year-on-year Q1 revenue, driven by currency exchange changes and stronger Softwareas-Service revenues
COGS is mainly relating to sale of Pexip-as-a-Service and is lower year-on-year despite higher revenue. This is mainly due to underlying efficiency improvements.
Improved EBITDA of positive NOK 35 million from lower operating expenses, up from negative NOK 52 million in Q1 2022.

Outlook and 2023 targets

Generally positive market outlook across the business areas

Poly partnership and FedRAMP Authorization provide additional momentum into H2 2023

On track on EBITDA and revenue targets, trending above target for cash flow

Q2 2023 ARR expected 97-100 million

Target 2023 EBITDA of NOK 100-150 million

We aim to become a profitable business, with targets supported by the solid progress on the cost reduction program Progress after Q1: On track

~40% EBITDA cash conversion in 2023

We target minimum NOK 40-60 million free cash flow¹ Progress after Q1: Trending above target

Flat to positive revenues

We target stable to positive development in annual recurring revenues Progress after Q1: On track

Upcoming dates

Q2 2023 & Half-year Presentation

August 10, 2023

Q3 2023 Quarterly Presentation

November 2, 2023

Q4 2023 Quarterly Presentation

February 14, 2024

Q&A Investor.pexip.com

Thank you for listening!

Investor.pexip.com

AI Terminal

Pexip Holding

3711_rns_2023-05-04_0e283c2e-fb47-40d8-820b-b4219e4c7de5.pdf