Pexip Holding ASA - Q3 2022 results

 Oslo, Norway, November 10, 2022 - Pexip Holding ASA ("Pexip" or "The Company", Oslo Børs Ticker: PEXIP), today presented its quarterly results for the third quarter of 2022, showing revenue of NOK 189.2 million and a negative adjusted EBITDA of NOK 56.2 million excluding one-off restructuring costs of NOK 5.3 million.

The revenue development has been stable, with flat growth year-on-year, however, realizing significantly lower costs than in Q2’22, EBITDA is improved quarter-on-quarter. The Company has made solid progress on its cost reduction program. Based on this, Pexip is setting its 2023 financial targets of NOK 100-150 million in EBITDA with a 40% cash conversion.

“The third quarter, and 2022 in general, has been impacted by a shift in focus for Pexip, which has driven a need to reduce costs and restructure the organization. We have communicated a new strategy and a plan to accelerate our return to profitability, and I am pleased to present the results this has given already. We feel confident that executing on this renewed focus will allow us to reach our 2023 financial targets of positive EBITDA of NOK 100-150 million and cash positive operations.” said Trond K. Johannessen, Pexip CEO.

Q3 2022 – Key Figures

In the third quarter, Pexip delivered a stable year-on-year development. Pexip’s subscription base measured in Annual Recurring Revenue (ARR) reached USD 100.7 million in Q3 2022, representing a year-on-year growth of 1% from USD 99.8 million in Q3 2021. The limited growth was largely due a large US Government customer not renewing the contract as the program lost its funding. Excluding this customer, the underlying year-on-year growth was 5%.

Key highlights for the quarter include:

• Phase 1 of the cost reduction program is completed with expected annual cost reductions of NOK 200 million, of which NOK 184 million realized in Q3. The previously announced phase 2 has been expanded and is in implementation, supporting the target of cash positive operations for 2023.
• Pexip’s subscription base measured in ARR was USD 100.7 million in Q3 2022, reflecting a 1% year-on-year growth.
• Quarterly delta ARR of USD -5.4 million driven by one main contract loss and a reduction in legacy areas.
• Video Innovation and Secure Spaces continue to drive good momentum. Video Innovation is up 18% year-on-year, with ARR growth of USD 3.3 million. ARR growth in Secure Spaces was reduced due to the termination of a large contract, resulting in a flat year-on-year growth of 1%. Excluding this, the underlying y-o-y growth in Secure Spaces was USD 4.4 million.
• Revenue for Q3 was NOK 189.2 million, and EBITDA excluding restructuring costs was negative NOK 56.2 million. Change in cash and cash equivalents was negative NOK 38.6 million.
• Pexip won a significant contract with a leading global technology company in Q3. Pexip will provide embedded software in order to extend the partner’s existing product’s functionality. The first year annual revenue expected to be USD 1.4 million.

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: https://investor.pexip.com/consensus.

Q3 results presentation

The third quarter results for 2022 will be presented by video webcast today, Thursday, November 10, at 08:00 CET. The presentation will be held in English by Trond K. Johannessen (CEO), Øystein Dahl Hem (CFO), and Åsmund Fodstad (Chief Revenue Officer). Please register using this form: https://www.pexip.com/events/q3-2022-results-presentation-registration.

Questions can be submitted to [email protected]. The presentation will be streamed via investor.pexip.com.

This information is considered to be inside information persuant to the EU Market Abuse Regulation and is subject to the disclosure requirements pursuant to Section 5 -12 of the Norwegian Securities Trading Act. This stock exchange announcement was published by Christine Arnesen, Investor Relations, Pexip Holding ASA, on 10 November 2022 at 07:00 CET.