Pexip Holding

Investor Presentation • May 6, 2021

Meet the world with video communication as it should be

Quarterly Presentation Q1 2021

May 6, 2021

Recent highlights

54% y-o-y growth in ARR to USD 87 million	NOK 180 million in revenue for Q1 2021		Executing on growth strategy; resulting in -30% EBITDA margin - NOK 13 million in positive operating cash flow
Launch and commercial success of Pexip Health	Recognition from Frost & Sullivan, Announced Nvidia collaboration		Increased sales and R&D capacity, won Best Place to Work award

3

Addressing a global market with a recurring revenue business model

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

• Users in ~190 countries
• Over 300 partners in 70+ countries
• Over 400 employees in 20+ countries
• ~97% of revenue from subscriptions

	EMEA	Americas	APAC
Share of ARR	56%	34%	10%

Video communications as it should be

• ✓A better way to meet with business-quality audio/video
• ✓Securely join from anywhere across multiple technologies
• ✓Customize the platform to meet the unique needs for the organization and IT
• ✓Full control of data privacy and sovereignty, and compliance with data security standards

Large organizations choose Pexip for three main use cases

High-quality video meetings with focus on privacy and security

Vertical market applications and integrations

Expanding access to Microsoft Teams and Google Meet

Pexip's differentiated customer offering is underpinned by unique technology

Smart transcoding Cloud agnostic

• Proprietary real time media engine
• Unique interoperability
• Unique AI capabilities in the cloud

• Proprietary technology allows Pexip's experience to be delivered on any existing platform or cloud provider (On-premise, GCP, Azure++)
• Unique data privacy and control
• Unique security capability through by-passing the internet
• Unique customization capabilities

Customers need for video will continue and evolve as they return to the office

Conference rooms

Small huddle rooms

Working from home

The new normal will be hybrid working

• People combining working from home and the office
• "Every" meeting will be a video meeting
• "Every" room in the office will have a video device
• Need to connect everything from the browser to the board room – internally and externally

IT organizations will re-evaluate their video solutions

• Given the new normal, are our new needs covered?
• With video being business critical, do we have the right solution(s) relative to our use cases and need for quality, privacy and security?
• Are there opportunities to further digitalize and video enable workflows with our customers or partner?

Pexip's technology is uniquely positioned to meet these new customer needs

Pexip's product and go-to-market model designed for large organizations

Solid growth path to long-term value creation

Pexip is targeting USD 300 million in ARR by end of 2024

Revenue growth ARR of USD 300 million by end-of-2024

Long-term profitability

2025 EBITDA of +25% with +25% revenue growth

Plan for negative 25-35% EBITDA margin in 2021/2022, neutral to positive EBITDA in 2023

Market recognition

Recognized leader position in the Meeting Solutions market within 3-4 years

Clear commitment to ESG - Pexip achieves carbon neutrality in Scope 1 and 2

Pexip is proud to submit its first sustainability report

• Pexip has identified material topics using the GRI standards and met the Sustainability Accounting Standards Board (SASB) disclosure requirements for Software and IT Services
• Greenhouse gas emissions and energy use is one of the material topics which is key to both customers and other stakeholders,
  • Important driver for adoption of videoconferencing solutions
  • Important criteria in assessing Pexip as a vendor

Pexip achieves carbon neutrality and commits to Paris agreement

• Pexip has through reviewing existing business and suppliers documented its scope 1 and scope 2 emissions and is proud to announce that Pexip through purchased carbon credits has become carbon neutral in Scope 1 and Scope 2.
• Building on this first step, Pexip will further set a GHG emission reduction target covering all direct and indirect emissions in 2021 in line with the Paris agreement and ICT industry commitments.

Q1 Operational update

Pexip continues to win the trust of new large enterprises and public organizations

Selected by a range of large organizations

Large organizations driving growth

Selected customer wins in Q1 2021 Share of ARR by account size in ARR, USD

Good customer traction for key product updates

EPIC integration and Best Telehealth Platform Award

First Pexip Private Cloud Customer Closed in Q1

Pexip recognized as a leading challenger in the Frost Radar for Cloud meetings and Team Collaboration Services

Frost perspective:

INNOVATION INDEX

Deployment flexibility, AI-based meeting experience and integrations into workflows

GROWTH INDEX

Strong and consistent growth of usage and recurring revenue

Expanding our technology collaboration with NVIDIA

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Continue to build growth capacity and culture

Scaling the team

Number of employees

Strong team and culture is key for future growth

• Strengthening the team is a key enabler for building stronger growth capacity
• Main focus continue to be on investing in additional sales and marketing capacity to build growth capacity, followed by R&D
• Pexip won the Best Place to Work award for the second year in a row in Q1, recognized by the Washington Business Journal

Sales and financial performance

54% growth in Annual Recurring Revenue – Added 5.4 million in Q1 2021

• Q1 2021 growth in ARR of USD 5.4 million, compared to USD 9.5 million in Q1 2020 and USD 2.0 million in Q1 2019
  • Q1 2020 saw growth of 4 to 5 million dollars from Covid-triggered upsell, as well as an extraordinary partner contract of 2 million dollars, in addition to 2.5 – 3.5 million dollars growth in other accounts.

Strong growth contributions from all geographies and product lines

New sales is the main driver for ARR growth with 50% in the last twelve months

• Continue to increase last twelve months new sales
• New sales increased with USD 2.3 million compared to Q1 2021 excluding an extraordinary USD 2 million partner deal in Q1 2020
• ARR net retention is now at 104%, down from 114% in 2020 and up from 99% in 2019 due to strong Covid-19 upsell in 2020

ARR growth driving revenue growth

Quarterly revenue development

NOK million

Comments

Self-hosted Software

Pexip as-a-Service Operating revenues – Pexip as-a-Service

• Overall growth of 88% Q1 2021 over Q1 2020 to NOK 72 million due to strong ARR growth. Some negative impact from NOK/USD exchange rate.

Operating revenues – Self-hosted Software

• NOK 108 million in revenue Q1 2021 compared to NOK 112 million in Q1 2020. Q1 2020 saw extraordinary upsell to existing customers, where some were renewed in Q4 2020, pulling revenue forward into Q4 2020.
• Software revenue mainly recognized at time of delivery, which leads to quarterly variations in revenue recognition.
• Currency impacting negatively, as NOK/USD is down ~15% compared to Q1 2020

Gross margin

• Cost of goods sold on same level as Q4 2020 due to higher Cloud Service revenue share and higher usage, as well as shift towards cloud-based hosting increasing cost of goods sold.
• Have moved several significant workloads from own hardware to cloud compute for better scale and operations as well as lower investments in own hardware

Increase in operating expenses from planned investments in Sales and R&D capacity

Executing on communicated growth strategy

• Significant investments into growth acceleration, as indicated at the IPO
• Main investments in strengthening the global sales team as well as R&D
• Ramp-up to productivity for quarterly growth in ARR for new sellers normally 9-12 months
• Headcount increased by 93% to 416 in Q1

Targeting negative 25-35% EBITDA margin in 2021/2022, break-even in 2023 and above 25% EBITDA margin by 2025

Capitalized investments

Cash flow bridge

Cash flow bridge Q4 2020

NOKm

Comments

• Positive operational cash flow for Q1 2020 due to strong working capital development following strong sales in Q4 2020
• Positive cash flow of NOK 72 million from March employee option share issue
• Cash position of NOK 1,147 million out of Q1 2021, Pexip has a solid cash position to fund the acceleration plan

Summary and Outlook

Q1 2021 in brief

Strong top line growth

• Continued strong ARR growth with USD 5.4 million in Q1 2021/54% y-o-y growth
• NOK 180 million in revenue for Q1 2021, +20% compared to Q1 2020

Executing on the acceleration plan

• Announced Pexip Health and NVIDIA collaboration
• Continue to build sales and R&D capacity reached 416 employees end of Q1 2021
• Negative EBITDA in line with announced strategy
• Solid cash position to invest in further growth

Outlook

Positive outlook for video communication

• Majority of enterprises shifting to hybrid working
• Organizations looking to embed video into their workflows towards customers
• Pexip's technology is uniquely positioned to meet these new customer needs

Will continue to execute on growth plan

• Increase investments in future growth by adding talent in sales and marketing as well as R&D – targeting 550-600 employees by end of 2021
• Plan for negative 25-35% EBITDA margin in 2021/2022, neutral to positive EBITDA in 2023
• Target 2025 EBITDA of +25% with +25% revenue growth

Expect to reach long-term target of USD 300 million in ARR by end-of-2024

Upcoming dates

Annual General Meeting May 20, 2021

July 8, 2021 Update on Annual Recurring Revenue

Q2 2021 quarterly presentation

August 12, 2021

Q&A