Pexip Holding

Investor Presentation • Feb 10, 2022

Meet the world with video communication as it should be

Quarterly Presentation Q4 2021

February 10, 2022

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Presenters

Michel Sagen Chair of the Board

Øystein Dahl Hem Interim CEO and CFO

John Thorneycroft SVP of Business Management

Karl Hantho President Americas

Trond K. Johannessen

CEO from May 2022

Extensive experience in scaling and commercializing complex technology globally, organically & through M&A

Background from top management and board positions in Embron Group, Tomra, McKinsey and Webstep

Strong cultural fit with the Pexip values and philosophy

Unique experience that will strengthen the Pexip executive management team

Pexip is a global technology company

535+ Employees in 35 countries

4,400 Enterprise and public sector customers

300+ Channel partners

101% Net revenue retention rate

2021 \$106.4 million in annual recurring revenue

Challenger in Gartner Magic Quadrant

Pexip's differentiated customer offering is underpinned by unique technology

Patented transcoding architecture Run on any compute platform

• Unique interoperability & no download experience
• AI using cloud compute
• More environmentally sustainable

• Total data privacy and control
• Full customization capabilities
• Unique position in sovereign video services

Unique technology drives our success in three core markets

Mass-adoption of video will transform our offices and our economy

End-user adoption in video has exploded, still to impact "old world"

End-user video adoption in the western world during Covid-19

Offices still need to adjust to a hybrid world

49 million meeting rooms globally

4 million video rooms¹

Mass-adoption of video will transform our offices and our economy

Transformation of offices in order to enable organizations to retain the best of remote and in-person work through enabling meeting spaces with video

A new video economy as

organizations leverage video to deliver personalized services and human interaction in a more flexible, sustainable and efficient way, benefiting from mass video adoption

Enhanced security requirements

as critical processes increasingly depend on video, increasing requirements and regulation

Q4 Operational Update

Recent highlights

10 10

Launched several important innovations in our new focus areas

Video infrastructure

including interoperability to Microsoft Teams and Google Meet

Enhanced Room Management Launched Jan 2022

Completes our capability to fully manage and support video room equipment

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Systems	27	UVE	હ	0	0 Version: v1.0.0	Enhanced Room Management	V
Address books Firmaco	Systems online 36 Total rysterns	0 Systems in calls	0 Queued actions	0 Non-approved systems	PROVISIONING
Panels and macross					Address	ept/prow.vc	0
Call statistics	A	િક	■	D	Pub	/tms/22345ghy/	C
People count	15	2	2	1	Type	TMS
Adenio V	Systems with warsings	Address books	Panels and macros	Collections	Pressonal	HTTPS
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Launched several important innovations in our new focus areas

meetings for secure environments Deeper authentication options with SAML ID

Launched Jan 2022

Allows for access restrictions based on common technologies like BankID

Video enablement

for healthcare, judiciary, government, retail and finance

Pexip Health – Far end Camera Control Launched Jan 2022

Allows medical personnel to control camera to maximize understanding of patient case

Pexip is now available in Microsoft Azure Marketplace, enhancing our reach to Large Organizations

• Microsoft Azure Marketplace is the most comprehensive software marketplace globally
• Pexip is now available
• Enable better cooperation with Microsoft in the field
• Enable easier access to customers through Microsoft frame agreements, significantly simplifying procurement process

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

Selected by a range of large organizations

Selected customer wins in Q4 2021

Large organizations driving growth

Share of ARR by account size in ARR, USD

Continued strong growth in Americas across all business areas

Pexip Achieves FedRAMP "In Process" Designation opening a new market for Pexip

FedRAMP will extend Pexip's reach into Federal, State & Local Governments, and in particular US civilian agencies, that prefer a Cloud Service

• FedRAMP is a US Government program that standardizes security assessment and authorization for cloud products and services used by U.S. federal agencies.
• FedRAMP is mandatory for all executive agency cloud deployments
• Pexip is the first Microsoft Teams Interop solution to achieve FedRAMP "In Process" status.
• Compliments Pexip's strength in the Defense community with our Self-Hosted solution
• Expect "Authorization" by Q4 2022; Customer discussions being initiated to be ready when approval status is secured

Have substantially strengthened the team since IPO, expect ARR growth substantially above people growth in 2022+

Number of employees

Have scaled the team to drive future growth Nearing the end of the aggressive expansion – expect employee growth below ARR growth in 2022

• Slower organic team growth in Q4 with 30 of 45 of the growth relating to the Skedify acquisition
• Have built a powerful team, and expect a more normal growth going forward - expect to add net 80-120 new employees in 2022 (15-22%)
• In 2022, growth in employees/cost expected to be substantially lower than expected growth in ARR going forward, supporting return to profitable growth
  • Target return to profitability in 2023

Sales and Financial Performance

30% growth in Annual Recurring Revenue – Added 6.6 million in Q4 2021

• Q4 2021 growth in ARR of USD 6.6 million, compared to USD 9.1 million in Q4 2020 and USD 4.4 million in Q4 2019
• Continue to win Fortune 500 customers
• Solid growth, however, negatively impacted by renewed Covid-19 restrictions impacting video infrastructure
• Positive impact from Skedify acquisition announced in Q4

Solid growth contributions from all geographies and products

USD million

New customers represent the main driver for ARR growth

• Sales to new customers continue to be main driver behind growth
• ARR net retention is at a normal level at 101%
• Churn in line with 2020 at 9.7%, and somewhat lower than end of Q3 2021
• Lowest churn with customers above USD 100k in ARR of 3% vs 9.7% overall

ARR growth driving revenue growth

Comments

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

• Overall growth of 28% year-on-year to NOK 89 million, of which NOK 1.8 million is related to Skedify

Operating revenues – Self-hosted Software

• Overall increase of 11% year-on-year to NOK 177 million
• Software revenue mainly recognized at time of delivery, which leads to quarterly variations in revenue recognition. This drives high revenue in Q4, as a large share of renewals are executed in Q4.

Gross margin

• Gross margin in line with Q4 2020, and increasing due to higher revenue/usage
• Improved gross margin in Q4 due to higher software revenues in line with expected seasonality
• Modernized service platform from own hardware to cloud compute, for better scale, resiliency and operations as well as lower investments in own hardware going forward

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

Executing on communicated growth strategy

Cash flow from investing activities per quarter Comments Significant investments in sales-related headcount, impacting EBITDA

NOK million, cash outflow

• Gross margin growth of NOK 35 million
• Growth in OPEX of NOK 75 million due to headcount growth and activity increase
• Positive EBITDA in Q4 due to strong software revenues and overall cost control despite planned growth investments

Full year negative EBITDA of NOK -124 million (-15%), which is above guidance of negative 25-35% EBITDA margin in 2021.

Cash flow bridge

Cash flow bridge Q4 2021

NOKm

Comments

• Negative net working capital development main contributor to negative cash flow
  • Trade receivables increased NOK 78 million due normal seasonality due to high Q4 invoicing
• Acquisition of Skedify including debt repayments as part of the transaction contributed negative NOK 48 million for Q4 2021
• Pexip has a solid cash position to fund the acceleration plan, including the announced repurchase of shares to cover future share option obligations

Summary and Outlook

Q4 2021 in brief

Solid financial results and position

• Continued ARR growth with USD 6.6 million in Q4 2021/30% y-o-y growth
• NOK 266 million in revenue for Q4 2021, positive EBITDA of NOK 10 million
• Solid cash position to invest in further growth

Strong operational momentum

• Have built a strong team both with regards to sales and R&D capacity
• New CEO appointed Trond Johannessen
• Acquired Skedify to enhance Video Enablement product portfolio

Updated Financial Guiding

	New
Revenue growth	ARR of USD 300 million by end of 2024		Unchanged
Long-term profitability	2025 EBITDA of +25% with +25% revenue growth		Unchanged
Short-term profitability	Negative 25-35% EBITDA margin in 2021/2022, neutral to positive EBITDA in 2023		Negative 15-20% full year EBITDA margin in 2022, return to positive EBITDA during 2023

Outlook

Positive outlook for the year, however, expect a challenging Q1 due to short-term uncertainties

• Continue to see uncertainty on return to office and hardware delays impact demand
• Strengthened partnership with a key partner and change in business model will impact ARR negatively with USD 2 million in Q1, however, we expect this to have a net positive impact on ARR development in 2022
• Leading position in high-growth niches underpin mid-term revenue target of 300 million dollars in ARR by the end of 2024

Starting return to profitability

• Revenue growth will improve profitability
• Will have a more balanced investment level going forward as we have a strong team in place

Upcoming dates

March 31, 2022 Annual & Sustainability Reports 2021

Annual General Meeting

April 21, 2022

Q1 2022 ARR Update April 7, 2022

Q1 2022 Quarterly Presentation May 12, 2022

Q&A