Quarterly Presentation Q4 2022

February 14, 2023

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Powering video everywhere

The interoperable video technology platform that powers everything from ultra secure government meetings, to personalized banking, to efficient hands-free work

Q4 highlights and key areas of focus

Leaner organization

Pexip exited Q4 with a team of 329 FTEs, down 40% from mid-Q2
Additional NOK 189 million of annualized reductions in costs realized in Q4

Sustainable cost base

Updated cost base estimate for 2023 of NOK 850 million (100 million below previous estimate)
Cost base going into Q1 underpin cash flow target at current revenues

Positioned for growth

Solid momentum within Secure Spaces with recurring revenues growing 8% in Q4 alone
Continue to strengthen partnerships in Connected Spaces with estimated resulting positive medium-term ARR impact

Revenue and ARR development

Results and cash

Q4 revenue of NOK 260.4 million, down 2.1% y-o-y
Total ARR at USD 99.6 million
Adj. EBITDA of NOK 21.7 million excl. restructuring costs, up 119% y-o-y
Cash flow of NOK -67 million, with a cash position of NOK 419 million

2023 Financial targets

20%+ growth in ARR in Secure Spaces and Video Innovation
Flat to positive development in total revenues
NOK 100-150 million EBITDA
NOK 40-60 million free cash flow excluding one-offs

Business update

A leaner organisation

~330 dedicated employees

Focusing on two distinct strategies

Note: Total ARR also includes Legacy areas not shown in this overview, amounting to USD 6 million

Pexip

Market

Pexip's unique technology enables differentiated customer offerings

Patented transcoding architecture

Unique interoperability & browser experience
AI using cloud compute
More environmentally sustainable

Run on any compute platform

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

Connected Spaces: Infrastructure & Interoperability Secure Spaces: Secure & Private solutions Video Innovation: Custom Solutions

Continue to enhance technology leadership on Connected Spaces

Best Microsoft Teams and Google Meet interop user experience

Enables you to bring a Teams-like experience to every meeting room
Seamless intuitive experience
Familiar meeting features
Allowing users to join all Teams, Google, Zoom and Webex meetings

Cost Savings

Reduce costs on expensive infrastructure
Postpones investments into new video hardware when moving to a new platform

Sustainability & User adoption

Maintaining existing hardware longer reduces e-waste and carbon footprint
Users can continue to use existing video hardware to join their meeting of choice no training required

Security and privacy concerns driving demand for Pexip

Geopolitical Complexity

Cyber Vulnerability

Many organizations are prohibited from using cloud solutions
Business continuity and redundancy solutions are becoming top of mind
Increased awareness in both public and private sector

Pexip Secure Collaboration

A modern self-hosted collaboration tool with chat, video and file-sharing.

Data sovereignty & control

supported solution

Modern and Interoperability

Total ARR base at USD 100m in Q4 2022

Booked Annual Recurring Revenue (ARR) development

Secure Spaces

ARR USDm

Continued momentum for our Secure Collaboration products with recurring revenues in Secure Spaces growing 8% in Q4, and underlying y-o-y growth of 60%
Increased awareness on cyber vulnerability and privacy gives Pexip an attractive position as a leading on-premise focused video collaboration provider
Increasing use of private networks and 5G as well as defence and ultra-secure applications which brings a broad set of opportunities within the secure collaboration space and enables further growth
Signed a 5-year agreement with a public justice organisation in Q4 with a TCV of USD 3.5 million

Video Innovation

ARR USDm

Stable ARR in Video Innovation, with ARR of USD 21.1 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
The customer base is a mix of long-term, large customers and growth opportunities
Pexip Engage, Pexip's scheduling solution built on the Skedify acquisition, delivered a strong quarter with 15% growth in the quarter, supported by the first direct \$100k+ win for the Engage product

• Signed a 3-year agreement with the biggest independent mortgage consultancy service in the Netherlands, De Hypotheker

Connected Spaces

ARR

USDm 63.0 61.9 61.5 61.3 61.2 Q4 2022 Q4 2021 Q1 2022 Q2 2022 Q3 2022

Have innovated to regain technology leadership in Connected Spaces through 2022
Continue to win major customers with our leading technology, in particular on Teams interoperability
Signed a top ten Fortune 500 company with Pexip Enterprise Room Connector for their existing video rooms
Signed a large Nordic bank for company-wide rollout of new video rooms and video infrastructure

Breakdown of ARR development

Development in ARR portfolio last twelve months

Legacy continues to decline in line with expectation, driving both churn and downsell
Have increased list prices from Jan 1, 2023 which will have a positive impact on net upsell through 2023
The single large customer lost in Q3 continues to affect the development, and excluding this customer, churn is slightly up compared to the previous quarter (USD 8.6 million compared to USD 7.2 million out of Q3 2022)

Continued solid progress on cost reductions support 2023 financial targets

Operational cost base development

NOK million, annualized

Updated cost base estimates

NOK million, full year

Note: EBITDA costs consisting of Cost of sales, Salary and personnel expenses and Other OPEX. Balance sheet costs consists of capitalized PPE and software development, principal lease payments and quarterly change in contract cost assets.

Q4 2022 revenue and EBITDA development

Revenues were NOK 260.4 million in Q4 2022, a 2.1% decrease y-o-y
Continued positive EBITDA development, driven by realized effects of the cost reduction program and providing support on projected return to profitability
Positive adj. EBITDA amounted to NOK 21.7 million excluding restructuring costs

Adjusted EBITDA NOK million

2022 revenue and EBITDA development

Full year revenues were NOK 867.1 million in 2022, a 7.6% increase y-o-y
Adjusted EBITDA of negative NOK 184.0 million, representing a -21.2% EBITDA margin
Including restructuring costs EBITDA amounted to negative NOK 245.3 million
Targeting positive EBITDA of NOK 100-150 million for 2023

2019 2020 2021 2022 370.0 867.1 678.5 805.5 Revenue NOK million Adjusted EBITDA NOK million 2019 2020 2021 2022 55.6 76.3 -124.3 -184.0

Q4 2022 and full year 2022 Financial results

Profit and Loss Comments

NOK million	Q4 2022	Q4 2021	2022	2021
Revenue	260.4	265.9	867.1	805.5
Cost of goods sold	17.7	18.3	93.8	76.9
Gross Profit	242.7	247.6	773.2	728.6
Salary and personnel exp.	166.0	158.2	719.7	634.4
Other operating exp.	55.0	79.4	237.5	218.6
Adj. EBITDA1	21.7	9.9	-184.0	-124.3
Restructuring costs	29.2	-	61.3	-
EBITDA	-7.5	9.9	-245.3	-124.3
D&A	44.3	20.5	115.1	73.7
Operating loss	-51.7	-10.6	-360.4	-198.0

Slight decline in year-on-year Q4 revenue, driven by lower ARR and revenue from Self-hosted Software.
COGS is mainly relating to sale of Pexip-as-a-Service and is stable year-on-year despite higher revenue. This is mainly due to underlying efficiency improvements, as well as some end-of-year one-off benefits.
Improved adj. EBITDA of positive NOK 22 million from lower operating expenses, up from NOK 9.9 million in Q4 2021.
Restructuring costs are one-off costs related to the cost restructuring program and resizing of the organization.

Summary and outlook

Summary & outlook

Profitability

Q4 2022 adj. EBITDA of NOK 22 million
Target EBITDA of NOK 100-150 million in 2023 with minimum NOK 40-60 million free cash flow¹

Growth and ARR outlook

Macro environment impacts sales cycles and decision processes
Continued good traction for Secure Spaces supporting target of +20% development across Video Innovation and Secure Spaces in 2023
Q1 ARR expected USD 97-100 million
For 2023 as a whole, we target a flat to positive development in total revenues
Technology leadership continues to attract strategic partnership opportunities

1) Free cash flow from operating cash flow and investing activities excluding one-off items Note: Assuming constant currency (LTM basis)

Upcoming dates

Annual & Sustainability Reports 2022

March 29, 2023

Annual General Meeting

April 20, 2023

Q1 2023 Quarterly Presentation

May 4, 2023

Thank you! Q&A

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Pexip Holding

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