Kahoot! ASA

Investor Presentation • Nov 4, 2021

Make learning awesome

Q3 2021 Presentation November 4 2021

Healthy market environment

As many markets return to more normalcy following the pandemic, we see a healthy market environment, and...

… Continued solid viral growth of the Kahoot! platform, with expanded mix of usage, both virtual, hybrid and physical, across all business areas

… Further strong usage uptake on Clever across EdTech apps available on the platform. Clever saw good annual usage growth among the top 100 apps on its platform during the quarter

Our mission is to make learning awesome

Our vision is to build the leading learning platform in the world

Highlights Q3 2021

• Achieved strong growth with \$27.8 million in invoiced revenue in Q3, up 139% YoY, solid post-pandemic performance across Kahoot! Group
• Scalable effects and all-time high operational cash flow of \$7.4 million, up 38% YoY, representing 31% of operating revenue, after five acquisitions LTM
• Accelerated commercialization, reaching 1M paying seats, up 180% YoY, positive momentum across all business areas, including larger corporate accounts
• Continued viral adoption with 1.9Bn+ participating players LTM and reached 30M+ active accounts and strong usage of platform with 300M Kahoot! sessions
• Strategic expansion in the US K-12 market, through completion of acquisition of Clever, digital learning platform used by 95K+ schools, 175+ new team members

New and existing customers are making learning awesome in Q3

Kahoot! platform growth levers

Lead with engagement and distinct software solutions for learning with great user experience

Expand commercial offerings to drive even greater operating leverage

Continuously deliver innovative solutions

across user segments and geographies

Leverage and productify vast platform and ecosystem of users, partners and content

Solid free cash flow to support growth through organic initiatives and inorganic investments

Leveraging Kahoot!'s strong global engagement brand and platform to capture increasing investments in learning across all segments

Viral growth

Free and paid subscription for individuals, teachers and students with premium offerings for schools and organizations

Community & Brand

Lifelong learning platform with global footprint in home, schools and corporations

User generated content

100 million kahoots created by users and premium content partners easily accessible

Innovation

Easy to use and engaging user experience for all use cases being continuously improved – live and on demand

Q3 Financials

Kahoot! Group financials Q3 2021

• Strong organic growth on the Kahoot! platform with more than 30m active accounts last twelve months, up 41% YoY
• Reached more than 1m paid subscriptions across all services, up 180% YoY, representing an organic increase from the second quarter of more than 80K, whereof more than 45K on the Kahoot! platform. Per the end of Q3, Kahoot! At Work reached 435K paid subscriptions, Kahoot! At School reached 335K paid subscriptions and Kahoot! At Home & Study reached 245K paid subscriptions
• Invoiced revenue (billings) reached \$27.8m in the third quarter, up 139% YoY, including Clever, which contributed \$5.7m for the month of September as part of the Kahoot! Group. Excluding Clever, invoiced revenue in the third quarter grew \$10.5m YoY to \$22.1m, up 90%. For the first nine months invoiced revenue grew \$39.7m YoY to \$67.5m (including Clever for September), up 143%
• Total revenue and other operating income of \$23.7 million, up 162% YoY. For the first nine months total revenue and other operating income grew \$40.2 million YoY to \$58.2 million, up 223%

41%

YoY Q3 growth LTM in active accounts - Kahoot! platform

180%

YoY growth in paid subscriptions per Q3

139%

Q3 YoY growth in invoiced revenue

Kahoot! Group financials Q3 2021

• ARR (Annual Recurring Revenue) of \$124 million, up 288% YoY, whereof Clever contributed with \$44 million from its U.S. ecosystem partners
• Adjusted EBITDA (excluding share-based compensation expenses and related payroll taxes, acquisition related expenses and listing cost) of \$6.0 million, representing 25% adjusted EBITDA margin. For the first nine months adjusted EBITDA grew \$13.3 million YoY to \$13.8 million
• Cash flow from operations (excluding payment of listing and acquisition cost, and cash effects related to share-based compensation) of \$7.4 million, up 38% YoY, with positive contribution from Clever, and \$17.8 million for the first nine months, up 71% YoY
• Cash and cash equivalents as of 30 September 2021, totaled \$206 million whereof \$6 million is cash held for employee withholding tax to be paid in the fourth quarter for exercised employee share options - the Group has no interest-bearing debt
• Completed the acquisition of Clever for a total consideration reflecting an Enterprise Value (EV) of \$435-500 million, on a cash and debt free basis, including an up to \$65 million 2021-2022 performance-based element

288%

Q3 YoY growth in Annual Recurring Revenue

25% Q3 adjusted EBITDA margin

31% Q3 cash flow margin

from operations of total revenue

Kahoot! Group accelerating momentum

• Reached more than 1m paid subscriptions across all services by the end of Q3 2021, up 180% YoY, representing an organic increase from Q2 2021 of more than 80K, whereof more than 45K on the Kahoot! platform
• Per the end of Q3 2021, Kahoot! At Work reached 435K paid subscriptions, Kahoot! At School reached 335K paid subscriptions and Kahoot! At Home & Study reached 245K paid subscriptions

1) Paid subscriptions is defined as total number of users on paid subscription per the end of the period, including new units from the time of acquisition 2) Conversion to paid subscriptions in all segments from customers in more than 150 countries

Kahoot! Platform – continued growth

Continued organic user growth on the Kahoot! platform (over the past 12 months). More than 30 million active accounts, up 41% YoY. 314 million hosted sessions, up 40% YoY. More than 1.9 billion participants (nonunique) globally, up 44% YoY. and 64% YoY growth on core Kahoot! paid subscriptions.

Key financial figures development

	Q3'21	Q2'21	Q1'21	Q4'20	Q3'20	Q2'20	Q1'20	Q4'19
Invoiced revenue	27.8	20.6	19.1	17.5	11.6	9.6	6.5	5.3
Invoiced revenue growth YoY	16.2	11.0	12.6	12.2	8.2	7.3	4.5	3.6
Invoiced revenue growth YoY %	139 %	114 %	195 %	230 %	241 %	317 %	222 %	219 %
Invoiced revenue growth QoQ	7.2	1.5	1.6	5.9	2.0	3.1	1.1	1.9
Invoiced revenue growth QoQ %	35 %	8 %	ਰੇ ਕੇਂਦ	50 %	21 %	49 %	21 %	56 %
ARR	124	75	ਦਰ	60	32	25	18	14
Revenue and operating income	23.7	18.4	16.2	11.5	9.0	5.2	3.8	2.8
Cost of sales	1.3	1.7	1.3	1.4	1.4	0.7	0.4	0.3
Employee benefit expenses	8.7	6.5	6.2	5.7	3.2	2.5	2.9	2.5
Other operating expenses 3	7.6	6.1	5.0	4.1	2.3	2.3	1.9	1.9
Total operating cost	17.7	14.2	12.5	11.2	6.9	5.4	5.2	4.7
Adjusted EBITDA	6.0	4.2	3.7	0.2	2.2	-0.3	-1.3	-1.9
Adjusted EBITDA marqin	25 %	23 %	23 %	2%	24 %	-5 %	-35 %	-69 %
Net cash flow from operations "	7.4	5.0	5.4	7.0	5.2	3.9	1.1	1.4
Cash flow from oper. in % of revenue	31 %	27 %	34 %	61 %	58 %	76 %	28 %	52 %
Cash and cash equivalents	206	440	254	256	73	73	34	41
Employee full time equivalents	445	244	204	182	127	128	120	110

Comments:

• Continued strong quarterly YoY invoiced revenue growth of more than 100% for the past eight consecutive quarters
• Recurring revenue business model growing ARR to \$124m by the end of Q3 2021 whereof Clever contributed with \$44m
• Scalable business model with increased leverage; Infrastructure cost for both free and paid users included in existing cost base
• Adjusted EBITDA growth YoY, with 25% Q3 2021 margin
• Solid net cash flow from operations ⁴of \$17.8m per Q3 2021, up 71% YoY, representing 31% of operating revenue

¹ Cost of sales only include direct third-party sales and distribution cost

² Not including calculated share-based payment expenses and related payroll taxes for the Group's share option program

³ Not including acquisition-related expenses and listing cost

4 Adjusted for cash outflow for acquisition and listing cost, and cash effects related to share based payment

Condensed profit and loss statement

	Q3 2021 4	Q3 2020 3	YTD 20214 YTD 2020 5		FY 2020 3
Total revenue and other operating income	23.7	9.0	58.2	18.0	29.5
Cost of sales 1	1.3	1.4	4.4	2.4	3.8
Employee benefit expenses -	8.7	3.2	21.4	8.6	14.4
Other operating expenses 3	7.6	2.3	18.7	6.4	10.6
Total operating expenses	17.7	6.9	44.5	17.5	28.7
Adjusted EBITDA	6.0	2.2	13.8	0.5	0.8
Adjusted EBITDA margin	25.2 %	23.9 %	23.7 %	29%	26%
Share based compensation expenses	2.8	0.5	6.7	1.1	3.1
Payroll tax share based compensation	1.4	2.5	(4.5)	4.8	14.2
Acquisition transaction and listing cost	3.3		6.3		1.0
Reported EBITDA	(1.6)	(0.9)	5.3	(5.3)	(17.5)

¹ Cost of sales are direct third-party sales and distribution cost

² Calculated share-based payment expenses and related payroll taxes for the Group's share option program are not included

³ Acquisition-related expenses and listing cost are not included

⁴ Includes Clever from 1 September 2021

5 Restated, ref. note 1 and 8 to the interim consolidated financial statements in the Q3 2021 report

Comments:

• Continued strong YoY revenue growth in Q3 of 162%, up \$14.6m to \$23.7m. YTD revenue growth YoY of 223%, up \$40.2m to \$58.2m
• Operational payroll and related benefit expenses ² were \$8.7m in Q3, up \$5.5m YoY impacted by consolidation effect of acquired companies
• Total operating expenses 2,3 of \$17.7m in Q3, up \$10.8m, and \$44.5m YTD, up \$27m impacted by consolidation effect of acquired companies
• Adjusted EBITDA for Q3 of \$6.0m, up \$3.8m YoY, and YTD adjusted EBITDA of \$13.8m, up \$13.3m YoY
• Q3 reported EBITDA of -\$1.6m include \$4.2m share-based compensation expenses and related payroll taxes, and \$3.3m acquisition transaction and listing cost

Condensed balance sheet

	30.09.2021	31.12.2020 2
Goodwill	507.8	77.8
Intangible assets	179.8	34.4
Property, plant and equipment	0.7	0.4
Right-of-use assets	3.0	3.2
Total non-current assets	691.4	115.7
Trade receivables	13.4	3.2
Other current assets	4.6	3.2
Cash and cash equivalents	206.4	256.1
Total current assets	224.4	262.5
Total assets	915.7	378.2
Total equity	556.4	286.2
Lease liabilities	2.2	2.3
Deferred tax liability	47.9	5.8
Other non-current liabilities	44.7	15.4
Total non-current liabilities	94.8	23.6
Lease liabilities	1.0	1.0
Trade payables	3.9	1.8
Contract liabilities (deferred revenue)	54.5	30.5
Other current liabilities	205.1	35.1
Total current liabilities	264.5	68.4
Total equity and liabilities	915.7	378.2

Comments:

• Total assets increased by \$537.6 million to \$915.7 million first nine months, primarily attributable to acquisitions
• Per 30 September 2021, non-current assets were \$691.4 million, up from \$115.7 million due to goodwill and intangible assets from the acquisitions of Clever, Motimate and Whiteboard
• Total liabilities first nine months increased by \$267.4 million to \$359.4 million per 30 September 2021, whereof deferred tax liability represents \$48.0 million, contract liabilities (deferred revenue) \$54.5 million. Deferred and contingent consideration for acquisitions amounts to \$223.1 million (whereof \$44.7 million are non-current) to be settled in combination of shares and cash.
• The Group has no interest-bearing debt and equity ratio of 61% per 30 September 2021

1 Restated, ref. note 1 and 8 to the interim consolidated financial statements in the Q3 2021 report

Cash flow statement

	Q3 2021	Q3 2020	YTD 2021	YTD 2020	FY 2020
Net cash flow from operating activities	12.1	5.4	20.9	10.4	17.4
Net cash flow from investing activities	(245.8)	(0.1)	(265.3)	(0.2)	(34.4)
Net cash flow from financing activities	0.5	(7.0)	195.9	24.5	231.1
Net change in cash and cash equivalents	(233.2)	(1.6)	(48.5)	34.8	214.1
Cash and cash equivalents at begin. of period	440.5	73.4	256.1	40.9	40.9
Effects of exchange rate changes on cash	(0.9)	0.8	(1.3)	(3.1)	1.2
Cash and cash equivalents at end of period	206.4	72.5	206.4	72.5	256.1
Adjusted cash flow from operating activities 2	7.4	5.4	17.8	10.4	17.4

¹Adjusted for cash outflow for acquisition and listing cost, and cash inflow related to share based payment

Comments:

• Adjusted cash flow from operations for Q3 was \$7.4 million, up 38 YoY, YTD adjusted cash flow from operations of \$17.8m, up 71% YoY
• Cash flow from investing activities of -\$245.8 million in Q3 due to payment for the acquisition of Clever. For the first nine months 2021, cash flow from investing activities was - \$265.3 million which includes the acquisitions of Motimate, Whiteboard and Clever.

Full Year 2021 Outlook

	FY 2018	FY 2019	FY 2020	FY 2021
Invoiced revenue	\$3.5m	\$13m	\$45m	\$107m+
Paid subscriptions*	46K	170K	675K	1.1m

• For the full year 2021, the Kahoot! Group expects to exceed \$107 million in invoiced revenue up from \$45 million in 2020, with continued solid positive cash flow from operations, and to reach 1.1 million paid subscriptions. The invoiced revenue contribution from Clever is included in the full year 2021 invoiced revenue expectation and expected to exceed \$16 million for the four-month period from September till December 2021. Clever is expected to exceed \$47 million in invoiced revenue for the full year 2021, implicating 29% YoY growth.
• For the fourth quarter 2021, the Kahoot Group expects invoiced revenue to exceed \$40 million with more than \$29 million from the Kahoot! Group (excluding Clever) and more than \$11 million from Clever, with continued solid positive cash flow from operations.
• As previously communicated, and following the completion of the Clever transaction, the Company is exploring the opportunity for a secondary listing, and expecting to conclude the assessment before the end of Q1 2022

*Including acquired units, except Clever

Kahoot! Group Ambition 2022

• For 2022, the current ambition for the Kahoot! Group including Clever is to reach \$190-200 million in invoiced revenue
• The operational cost base2) is expected to represent approx. 70% of invoiced revenue which indicates approx. 30% cash conversion of invoiced revenue
• Kahoot! Group long term ambitions will be disclosed with the Q4 2021 report

1) Includes invoiced revenue from Clever for the four-month period from September till December 2021

2) The operational cost base does not include depreciation and amortization, and is adjusted for special operating items. Special operating items are material expenses and other material transactions of either a non-recurring nature or special in nature compared to ordinary operational expenses and include adjustments for share based compensation expenses and related payroll taxes, acquisition-related expenses, and listing cost preparations.

Business Areas

Engagement & Communication

Company culture

Training & development

A better experience for all learners

Over

10K

educational institutions have already deployed multiuser Kahoot! teacher licenses

Make lessons interactive

Equip IT admins with increased control, security & compliance

Elevate learning at your entire school or district

courses

Maximize student engagement by designing full class sessions

at school

100s of millions of students

Embraced by over 9 million teachers globally

10m+

are using Kahoot! at home with over 100 million games played by families

Premium subscription for awesome learning for the entire family

at home

Learn

math &

algebra

Coming soon

Learn

to read

Kahoot! Kids: Fun learning experience for kids age 2 - 7

Language Learning

Kahoot!+ Study Study with friends with flashcards, tests and challenges

9m+

educators & teachers, and hundreds of millions of students across the world use Kahoot! to make learning awesome

Marketplace coming Q4

High quality, verified content

portal

Embraced by over 30 million players monthly

If teachers didn't try new things, our students wouldn't get the best from us. "

Aimee Copple

Premium learning content

By verified educators and publishers to engage students

Enhanced learning experience with premium IP

Available on Amazon Appstore

Apple Schoolwork features make teaching with Kahoot! even more awesome

Engage with Kahoot! directly in Microsoft Teams and Powerpoint

Accelerated growth through the Kahoot! partner ecosystem

Extending the Kahoot! experience with Google Classroom

Selected new partners

Premium content partners

Summary

Kahoot! main growth initiatives 2022

Complete offering for professional development and learning with organization-wide license plan

Elevated learning with complete site licenses for schools, districts and campuses

Premium subscription for the entire family, study-peers and friends

Leveraging global user base and partner ecosystem to offer commercial marketplace for verified content creators

The leading digital learning platform for U.S K-12, a community for students, families and educators

Summary Q3 2021

Strong continued growth and Back-To-School and -Work season

• Healthy post-pandemic market environment with strong uptake of usage and revenue growth across Kahoot! Group
• Scalable software platform yields strong cash flow from operations and initial positive synergies from acquisitions
• Accelerated commercialization, including onboarding of larger corporate accounts for the Kahoot! at Work category. Implementation of Actimo and Motimate cross-sales and product integration into Kahoot! at Work offering commenced
• Continuously developing and launching innovative, user-centric products, features and offerings to increase user value, across all business areas. Key commercial initiatives launched for mid to long-term revenue trajectory
• Post acquisition close, Clever performing ahead of expectations. Strategic expansion projects as well as alignment of product roadmap and sales initiatives with Kahoot! Group

Kahoot! Group

A globally recognized brand across sectors and segments

A scalable cloud platform supported by a viral business model

Experienced organization with growth track record from the industry

Clear path to profitable growth with positive cash flow from operations

Continuously improving all services for all segments and user groups

Solid funding for strategic partnerships and non-organic growth

Join the Kahoot! journey

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