Pexip Holding

Investor Presentation • Dec 9, 2021

Capital Markets Day 2021

December 9, 2021

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Game-Changing Pandemic

Climate Consciousness

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Geopolitical Complexity

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Cyber Vulnerabilty

Mega Trends Shaping Pexip's Business and Product Strategy - addressing the needs of our customers

Powering the Video Economy

Presenters

Michel Sagen Chair of the Board

Øystein Dahl Hem Interim CEO and CFO

Nico Cormier Chief Technology Officer

Åsmund O. Fodstad President Global Sales & Marketing

Ingrid Woodhouse Chief People Officer

Jordan Owens Vice President Architecture

Peter McCarthy Vice President Public Sector Sales

Agenda

Strategy

Presenter: Øystein Dahl Hem

Pexip is a global technology company

• 535+ Employees in 35 countries
• 4,400 Enterprise and public sector customers
• 300+ Channel partners
• 100% Net revenue retention rate
• 2021 \$100,000,000+ annual recurring revenue

Challenger in Gartner Magic Quadrant¹

Ranked #1 in Wainhouse user survey²

Entrepreneurial company of the year by Frost & Sullivan³

1) Gartner Quadrant for Meeting Solutions 2020, by Mike Fasciani, Tom Eagle, Adam Preset, Brian Dohert 2) Wainhouse Research; Brand Perception Ratings Overview – Video Meeting Solutions, 1 February 2019. NPS, collected from 2,002 users

3) Frost & Sullivan Entrepreneurial Company of the Year Award 2020, the Global Video Conferencing Industry, Author: Robert Arnold, Principal Analyst and Program Manager

Pexip represents the Norwegian video communication heritage

Pexip represents knowledge, talent and culture built up over 30 years

Solid and strong business momentum

100% reinvested in sales, marketing, products & engineering

Proud to serve the most demanding organizations

Large organizations driving growth

Share of ARR by account size in ARR, USD

Currently ~15% of Fortune 500¹ as customers

COVID-19 fueled the hyper adoption of video

Global adoption acceleration Digitization of customer interactions*

From 13% to 70% end-user video adoption over the period in the western world

Enabling business innovation

Pexip's core markets represent a massive market opportunity

Unique technology drives our success in three core markets

A strong and growing ecosystem of partners

Outstanding team with a great culture

Professional & Fun

Freedom & Responsibility

No Bullshit

One Team

Why we win

Technology

Presenter: Nico Cormier

Study on the Effect of Delay on Human Voice Perception

if delays can be kept below 150ms, most applications, both speech and non-speech, will experience essentially transparent " interactivity "

150ms - the magic number for innovation in our industry

150ms

Transport - a significant chunk of 150ms

Compute – where the magic happens

Compute

180 R&D engineers

• experts in signal processing
• 34 nationalities; 20-30% relocations
• 3-4% turn-over

52 patents in real time video processing and highly distributed real time systems

One strong engineering culture

2

Built as-a-platform

Switching

Compute done on end-user device Heavyweight client architecture

Core Transcoding

Compute done in the network Lightweight client architecture

Download application Limited to one protocol AI and compression on the end-user device Lightweight, no download experience Unique interoperability AI and compression in the network

1 Core Transcoding – implications & benefits

Mixed reality and augmented reality on low power devices. 8 hours with AI on Pexip vs 30 minutes for competition

AI in the network on any device/browser with no download

Sustainability thanks to lower

bandwidth usage, extended equipment lifetime and improved battery life

Proprietary Shared SaaS

Tightly bound to a single cloud Runs only on the public internet Customers' data mingled together

Agnostic Infrastructure

Runs on all cloud providers and on-prem Can by-pass the internet Customer controls data exposure

2 Agnostic Infrastructure – privacy and security benefits

Security and Privacy

• Compliant with GDPR and ISO 27001
• All media encrypted by default
• HIPAA compliance for US Healthcare
• Highest US military security certifications
• JITC-certified, FIPS 140-2 and 508 compliance

Secure and Reputable data centres

• SOC2, SSAE16 and ISO 27001
• Cloud data stored in Norway
• Media maintained in regions

Sovereign cloud

• Fedramp (USA)
• CCN-STIC (Spain)
• CSPN (France)
• BSI (Germany)

Built as-a-platform

Built as an end-user application

Technology and applications tightly coupled Very limited branding/customization

Built as a "technology inside" platform

Decoupled technology and applications License technology allowing total customization

Target markets

Presenters: Nico Cormier, Åsmund O. Fodstad

Unique technology powers our success in three core markets

Enterprise Room Connector

Pexip upgrades existing rooms to the cloud

Customer is moving to a SaaS and has incompatible meeting room equipment.

Equipment registers against the Pexip cloud, making them easy to manage, able to dial into meetings (such as Teams or Meet) and upgrades their experience with AI

1 Core Transcoding used to connect incompatible protocols

Core transcoding allows Pexip to talk all protocols

• Translate any real time media signal on the fly
• Leverage our media and protocol expertise
• Added end user value with AI
• Consumable both as a SaaS or self-hosted

Standards-based Video Infrastructure Why Pexip?

Core Transcoding allows us to transcode on the fly incompatible protocols and support brand both new and upgrade old equipment

Certifiedby MSFT and Google. Tight commercial, GTM and engineering relationship

Agnostic compute allows customers to consume ERC as a SaaS (shared) or self-hosted

GTMwith Microsoft, Google and channel partners

Future opportunity

Increase in complexity

Interop is here to stay

Independent

Unique technology powers our success in three core markets

Pexip for Critical Meetings

Video meetings for environments with stringent privacy & security

Customer is government or large organizations with clear focus on privacy

Pexip provides a self-hosted (on-prem & cloud native) platform optimised for critical video meetings

Agnostic infrastructure guarantees complete privacy

Agnostic Infrastructure

Runs on all cloud providers and on-prem Can by-pass the internet Customer controls data exposure

The growing market for critical infrastructure

By 2024, 80% of critical infrastructure organizations will abandon their existing siloed security solutions providers in order to bridge " cyber-physical and IT risks by adopting hyper-converged solutions. "

Pexip is finding great success in ultra secure meetings segment

Americas use cases:

• Deliver Ultra secure / highly private platforms to the military and government 1
• Becoming Fedramp certified to deliver a US sovereign cloud service 2

EU use cases:

1

2

Deliver Ultra secure / highly private platforms to the military and governments

APAC use cases:

Deliver Ultra secure / highly private platforms to the military and governments 1

Core Transcoding allows us to support brand both new and upgrade old equipment

Agnostic compute allows customers for total privacy

Critical video meetings

What do we deliver to CIO/IT

Branding & Customisation. Meetings your way. Your brand. Your customer experience.

Security. In and beyond the meeting. From encryption and data sharing to certification requirements and rigorous testing.

Critical video meetings

What do we deliver to CIO/IT

		Q Search for meetings, users, video systems			8.0	ਹੈ 0
<<	Meetings				All time	· Export as v
	50,678.73 Total minutes 14455 Total meetings · Live meetings	6,250 Live meetings min 45 Live meetings Past meetings	8 0 24% Total video meetings Settings	12 Total participants 4 Video systems	156 Total unique hosts	5 Issues 个 24% Hide live view
	All CVI GMeet Pexip Video Systems Users Rooms Issues
	e 16 8
	London, UK 16 live meetings 650 minutes
	Average quality: Participants: Video Systems	poor poor 32 8
	· Data center · Live call · Hig quality	· Medium quality · · Poor quality . Unknown

What do we deliver to end users

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GOVERNMENTS choose us because of privacy but also flexibility. They have a very complex environment with very complex use cases needing both interop and custom workflows

Future opportunity

Unique technology powers our success in three core markets

Pexip for Video Enablement Help digitalizing critical services

Customer is a Healthcare provider, Justice court or large organizations in Retail or Finance –

Pexip delivers a video enablement platform tailored for delivering these customers' services over video

Leveraging key technological differentiators

Agnostic Infrastructure

Runs on all cloud providers and on-prem Can by-pass the internet Customer controls data exposure

2 3

Built as-a-platform

Decoupled technology and applications License technology allowing total customization Vanilla experience easily customizable

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Enabling business innovation

Success results & customer feedback

"Customers are very happy to be able to attend appointments from home. Above all the screen-sharing feature is very much appreciated. It allows them to work on documents with a staff member"

Lucas Albrecht, Product Manager Mein Videotermin, Federal Employment Agency

HMCTS – Judicial sector (Her Majesty's Courts and Tribunals Service)

Core requirement:

• Increase efficiency in the courts system
• Save specific court cost, reduce back log and minimize society cost
• Enable hearings that otherwise could not take place
• Virtualize the entire Court service workflow
• Support for both Virtual and hybrid

True to life experience

Virtualized the existing Court flow and integrated into existing scheduling and Gov authentication system through API's

Tailored interfaces

Fully branded to increase trust and comfort level

Accessibility

Service accessible for anyone without any software install (mobile or Web)

Security and compliance

In country deployment for privacy and compliance Security and compliant with industry standards

Scalability

Scalable on demand with fully virtualized architecture

Virtual Hearings for Crown & Magistrates' courts

Central Briefing or Court room

Multiple User Roles with defined access rights

Multiple Room Types, configurable sub-rooms or discussions rooms

Workflow Automation Rules & Configurations for users and rooms

Fully secure and supported on the Infinity platform

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Remote engineering

Assisted and Mixed Reality

Remote Expert Remote Inspection Remote Audit Training Health & Safety Telehealth Remote Sales

acquires

Sales Engagement Platform

• Easy to schedule 'meet your expert' web plugins
• Primarily towards finance and retail
• Extensive CRM & CMS integrations

Super resolution Artifact reduction Video noise removal Virtual background

Video Effects SDK Augmented Reality SDK Audio Effects SDK NVIDIA Jarvis SDK

Face tracking Face landmark tracking Face mesh Body pose estimation Eye contact Audio2Face

Noise removal Room echo removal

Conversational AI (transcription and translation)

Video Enablement

Why Pexip?

Complex environment means a lot of existing ¹ incompatible equipment/protocols/integrations

API & SDKs allows customers to build in no time their a own apps – with a time to market lower than competition

Agnostic Infrastructure translates into total privacy for data and data flows. Esp towards Healthcare – either by passing entirely the internet or operating in a sovereign way

Guest experience experience is the best in the industry with no download required. Works on all versions of browsers and support for poor network conditions

Built-as-a-Platform allow us to provide the right level of customisation

AI on any devices allows for adding real value to these use cases: gaze correction, smart transcription, live captioning, etc…

Built as-a-platform

Execution and culture

Presenters: Øystein Hem, Ingrid Woodhouse

Pexip has successfully solved the complex video needs of large organizations since its inception

• Investing raised capital for growth in 2020 and 2021
• Accelerated ARR growth and normalized investment level in 2022 improving profitability
• Return to profitable growth from 2023+

Strong underlying performance in three core focus areas

	Video infrastructure	Critical video meetings	Video enablement	Other areas
Market size 2024E MUSD	~700	~1,000	~3,000	N/A
ARR1 MUSD	58	10	18	14
ARR growth LTM1 Percent of ARR	54%	160%	90%	-37%
Churn LTM1 Percent of ARR	7%	5%	3%	26%
Typical customer size2 USD 1,000 ARR	50-150k	100-300k	400-600k	6-10k

Customer size development show strong performance among large customers

Share of ARR by account size in ARR USD				YoY growth Percent	Churn LTM Percent p.a.	Number of customers
		+37%	100M
	73M		22%	20%	20%	3800
	25%		22%	32%	14%	420
	24%
	51%		56%	47%	5%	178
	Q3 2020 USD >100,000	USD 30,000-100,000	Q3 2021	USD <30,000

Approaching the next phase of investment plan

Booked Annual Recurring Revenue ("ARR") portfolio per year end, USD million

• Investing raised capital for growth in 2020 and 2021
• Accelerated ARR growth and normalized investment level in 2022 improving profitability
• Return to profitable growth during 2023

Robust underlying profitability in line with long-term ambition of growth + EBITDA above 50%

Illustrative EBITDA build-up NOK million last twelve months (Percent of revenue)

• Last twelve months revenue growth of 36%, gross margin of 90% and EBITDA of 25% excluding accelerated growth investments
• Invested NOK 276 million in growth investments, while with limited revenue impact so far, that are essential to accelerate growth in a high-growth market

Long term operating model

Percent of revenue

Business drivers	2019	2020	Last twelve months	Long-term model
Revenue growth	30%1	83%	36%	>25%
Gross margin	95%	94%	90%	88-92%
Salary costs	51%	59%	79%	45-50%
Other OPEX	23%	27%	22%	15-18%
EBITDA	21%	8%	-11%	>25%

Purpose Culture People Organization

Purpose

• Communication
• Guiding Star
• One Team

Culture

• Innovation
• Excellence
• Collaboration
• Ownership

People

• Thorough Recruiting
• Quality Growth
• Strong Foundation

Organization

• Agile Organization
• Flat Structure
• Continuous Learning

Summary

Massive USD 5 billion market opportunity in Pexip's core focus areas: video infrastructure, critical video meetings and video enablement – further opportunity to expand in adjacent markets over time

Strong underlying performance in core focus areas, already accounting for more than 85% of ARR

Core focus areas have higher growth and average revenue per customer and lower churn than average

Will start improving profitability in 2022 and be profitable again during 2023

Long-term track record, proven culture of execution and unique technology leadership underpin long-term guidance of 25% revenue growth and 25% EBITDA margin, as well as our target to reach 300 million dollars in ARR by the end of 2024

Q&A