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Pexip’s subscription base measured in Annual Recurring Revenue (ARR) reached USD
99.8 million in Q3 2021, up from USD 72.8 million in Q3 2020, representing an
increase of 37%. Pexip demonstrated solid year-on-year growth due to strong
sales to public sector organizations. Key highlights for the quarter include:
· ARR reached USD 99.8 million, reflecting a 37% growth year-on-year
· Revenues at NOK 183 million, 35% growth year-on-year
· EBITDA at negative NOK 40 million, developing as expected, and in line with
investment plan and strategy
· Named a “Challenger” in the Gartner Magic Quadrant for Meeting Solutions
Key contracts from Q3 include:
· The Defense Information System Agency (DISA), a US Department of Defense
(DoD) combat support agency, composed of military, federal civilians, and
contractors. DISA provides information technology (IT) and communications
support to the US President, Vice President, Secretary of Defense, the military
services, combatant commands, and any individual or system contributing to the
defense of the US. DISA chose Pexip to power their main videoconferencing
service, as well as support interoperability with Microsoft Teams;
· The US Department of Labor, which selected Pexip-as-a-service as the
collaboration solution for its new Hybrid Workplace initiative for its almost
18,000 employees;
· A Leading Central-European Car Manufacturer chose Pexip Self-hosted software
for Pexip meetings, Microsoft Teams interoperability and One Touch Join
functionality. Pexip will provide an integrated platform for the company’s
multiple locations and various videoconferencing solutions around the world;
· An EU Institution signed a contract for Pexip’s Self-hosted software,
including Cloud Video Interoperability (CVI) for Microsoft Teams
interoperability.
The percent of retained revenue from existing customers was 100% year-on-year,
including churn of 10.8% over the last twelve months.
“We continue to follow our communicated growth plan, and our profit this quarter
is affected by the significant investments in sales resources, which will
accelerate our growth in the years to come. Although the repercussions of the
COVID 19 pandemic continue to affect the length of the sales cycle and ramp-up
of sales staff, we are confident that our unique product offering combined with
the build-up of our organization will bring us to our target of USD 300 million
of ARR in 2024,” said Pexip Interim CEO and CFO, Øystein Dahl Hem, and
continued:
“The third quarter is usually a strong quarter for Pexip in the public and
federal sectors and we experience that our strengths within secure solutions for
mission-critical communication requiring strict privacy and security are very
attractive for organizations such as the military and public departments and
agencies. A good example is The Defense Information Systems Agency (DISA) in the
United States. In addition, Pexip’s unique capability to link different
videoconferencing systems seamlessly together, interoperability, continues to be
a key selling point for many large organizations.”
Q3 2021 Financial Highlights
Revenue in Q3 2021 was NOK 182.9 million, up 34% from NOK 136.3 million in Q3
2020, driven by strong sales in the quarter from the Pexip’s Self-hosted
software.
Cost of sale in Q3 2021 was NOK 22.7 million, reflecting a gross margin of 88%,
up from NOK 11.0 million in Q3 2020 due to a shift towards cloud compute
compared to investing in own or renting hardware, which also reduces investments
and operating expenses.
Salary and personnel expenses amounted to NOK 152.1 million in the quarter (83%
of revenue), up from NOK 117.3 million (86% of revenue). The increase is mainly
due to high growth in employees over the last twelve months, in line with
Pexip’s growth strategy.
Reported EBITDA in Q3 was negative NOK 40.5 million, reflecting a negative 22%
margin, down from negative NOK 23.8 million in Q3 2020. The development in the
EBITDA margin is as expected, as the Company invests into growth initiatives
where the expected increase in revenue will trail the increase in operating
expenses.
Outlook
In the long-term, Pexip believes that the growth of enterprise-grade video
communication will increase due to the explosive adoption and usage of video
communication following Covid-19, and implementation of sustainability measures.
Many enterprises plan to adopt hybrid working models as they return to the
office, combining office and remote working, that will provide benefits far
beyond the need for social distancing, such as reducing travel and related
emissions, enabling work flexibility and increasing productivity. Furthermore,
Pexip believes in increased use of video in organizations’ workflows with their
clients/customers, creating additional new and significant market opportunities.
To accelerate growth Pexip has invested in increasing the Company’s sales and
marketing presence as well as R&D capabilities, and expects to continue to do
so. Pexip intends to deploy up to 70% of the net proceeds from the IPO over the
next two to three years. This implies returning to a neutral EBITDA in 2023,
from an estimated negative EBITDA-rate in 2021 and 2022 in the range of negative
25-35%. As Pexip exits the investment period, the Company expects above 25%
EBITDA-rate in 2025 together with revenue growth above 25%. The key enabler for
all these initiatives is strengthening the Pexip team, and Pexip is targeting
550-600 employees by the end of 2021.
Analyst consensus estimates
Every quarter ahead of the earnings announcement, Pexip collects earnings
estimates from the equity analysts currently covering the company. The consensus
estimates and the methodology used in preparation of the consensus estimates are
published on the company’s IR webpages here:
Investor - Consensus.
Q3 results presentation
The third quarter results for 2021 will be presented at Felix Konferansesenter
(Atlantic), Bryggetorget 3, Oslo, Norway, and by a video webcast on Thursday,
November 11, at 17:00 CET. The presentation will be held in English by Øystein
Dahl Hem (Interim CEO and CFO), Tom-Erik Lia (Chief Strategy Officer), Åsmund
Olav Fodstad (President Global Sales & Marketing) and Michel Sagen (Chair of the
Board). Please register using this form: https://www.pexip.com/q3-2021-results
-presentation-registration. Questions can be submitted to IR@pexip.com.
This information is subject to the disclosure requirements pursuant to Section 5
-12 the Norwegian Securities Trading Act.
Contact persons:
Investors: Investor Relations, IR@Pexip.com, +47 94 80 58 51
Media: Lars-Einar Petterson, Communication Manager Norway,
Lars.einar.petterson@pexip.com, +47 93 44 88 27
About Pexip | pexip.com
Pexip simplifies complex videoconferencing to empower organizations with face-to
-face collaboration, no matter the location or technology. Our scalable platform
enables high-quality video meetings, with enterprise-grade security, and is
easily adapted to fit customers’ IT requirements and existing infrastructure.
This makes Pexip the leading provider for large enterprises and public sector
organizations. The solution is sold through 300 channel partners in 75 countries
and used in more than 190 countries. Pexip was listed on the Oslo Børs in May
2020.
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