Pexip Hldg Asa

Good morning and welcome to this presentation of PECSIP's fourth quarter results. My name is Trond Johansson and I'm the CEO. Together with me here at Lysaker today, I have our CFO, Øystein Hem, and our Chief Revenue Officer, Osmund Fodstad. Together we will take you through the highlights of the quarter and what we are focusing on going forward. The standard disclaimers apply as usual. First, a short overview of Pexip for those new to the company. Pexip was founded in 2012 and currently we operate in 25 countries across the globe. We are a specialist video conferencing and infrastructure company focusing on interoperability and secure and custom meetings. We do software only, delivered as a software, or software delivered as a service. Pexip has unique and established relationships and partnerships with the leading companies in our industry. We complement and enhance their solutions and do not generally compete with them. Our customers are mainly large organizations in both the private sector and the public sector that have complex needs when it comes to video collaboration. The financial performance is strong and has been continuously improving over the last quarters. Now to the highlights of the past quarter. Our annual recurring revenues, ARR, grew with US dollars 8.8 million during the quarter, and this gives us an ARR base of $131 million leaving Q4. This is the top end of the updated Q4 guiding we gave you in December. In Q4, we saw a significant improvement in the growth in connected spaces as a result of a couple of large deals that closed in the quarter. In our secure and custom business area, the positive development continues, driven by increased awareness around the need for secure and sovereign communication solutions. In connected spaces, we also see solid progress on our solutions for native rooms, and the launch of Connect for Google Meet hardware in Q4 has been a success, both technically and commercially. EBITDA came in at 94.2 million Norwegian kroner in the quarter and 316 for the full year. Free cash flow was 71.9 million in Q4 and 354 million for the full year. If we look at this Q4 performance in the context of the last 12 months, we see an accelerated development on all key parameters. Our total ARR continues to grow, and year over year, the growth rate was 16%. Our 12-month rolling EBITDA reached 316 million Norwegian kroner, which is a 53% improvement since Q4 last year. This corresponds to a 26% EBITDA margin. And finally, the free cash flow the last 12 months of 354 million NOK is 80% higher than at the same time last year. We take this performance as evidence that we are operating in attractive markets with relevant products and a strong market position. PegSIP has two main solution areas. PegSIP Secure and Custom is privately hosted video meetings that give complete privacy and data control with the desired level of customization. PegSIP Connected Spaces is about video meeting interoperability by enabling any meeting room to connect to any meeting platform. Now a few words about each of these business areas. In Secure and Custom, we are targeting a segment of the video conferencing market that is largely unserved by the major players like Teams, Zoom, Google, and WebEx. We are catering to those organizations that have limitations with respect to use of global cloud platforms like Azure, GCP, or AWS. And consequently, they have a need for their conferencing software to run in controlled IT environments, either self-hosted or in private or sovereign clouds. This is a fast-growing market as a consequence of the geopolitical situation and the need to control data. Data sovereignty is increasingly relevant, in particular in Europe. Significant investments are being made in building sovereign IT infrastructure and solutions in many countries. Pexip has a unique position in this growing market with a modern and future-proofed solution that has the flexibility to be integrated and customized to the needs of the customers, while at the same time being certified and tested to the highest standards in the market. Again, in this market, Pexip's offering is a secure video meeting platform that can be used exclusively or alongside, for example, Teams or Zoom. The solution includes security features such as tailored user authentication, clear meeting classification labeling, and complete control over what data is stored and where. Integrating with chat is also an option. The Pexip platform can be installed in all relevant IT environments and gives complete control to the customers as no data needs to be shared with any external third parties. The secure meeting can easily be booked through the Outlook calendar or started through a chat session exactly the same way as for Teams meetings. We're now starting to see that large organizations deploy more than one video meeting solution, and TechSIP is very well positioned as the secure meetings alternative. Now to connected spaces. Here, we have basically completed the any-to-any vision and really delivered on the promise. In close partnerships with Google, Zoom, and of course, Microsoft, we provide the most comprehensive suite of interoperability solutions available in the market. In Q4, we launched a brand new connected spaces product named Pexip Connect for Google Meet Hardware. With this new product that we have co-developed with Google, all meeting rooms that have Google Meet Hardware can now connect to Teams meetings with excellent quality. The market interest and resulting uptake is strong, and we have close to one million US dollars in new ARR on this product during Q4 alone. Now, let me leave it to Osmund for a more detailed sales update.

Thank you, Trond, and good morning, everyone. Pexip delivered a strong fourth quarter, reinforcing our momentum across both secure and custom and connected spaces. For Secure and Custom, Pexip added $2.9 million in AR and reached $56.3 million for the end of the quarter. It's a solid 25% year-over-year increase. Growing focus on sovereign IT solutions across Europe strengthened our position, and our solutions for defense, government, and healthcare continue to be key contributors to our momentum in Q4 and beyond. in connected spaces q4 ended as an exceptional strong quarter for us ar grew by 5.9 million us dollars reaching 74.7 a solid 10 year-over-year increase growth in this segment is fueled by major customer wins as organization transition across video platforms and rely on Pexip to ensure a seamless, consistent user experience. Let's look at a couple of wins. This quarter, we had so many large wins that we decided to share more of them with you, and as well address the commonalities that strengthen our relevance and competitive position. So, across our global wins in the last quarters, we see four growth drivers that contribute to our success. Number one, the acceleration of sovereign IT solutions and the increasing need for data control. Governments across Europe, the Middle East and Asia are increasingly selecting PECSIP as their standard for secure internal and cross-agency collaboration. Let me just use a few large wind examples. A central European state IT provider now powers all intergovernmental communication with a self-hosted sovereign PECSIP solution. In Southeast Asia, the Ministry of Defense of a leading nation now powers all critical collaboration with a modern, integrated, complete collaboration solution from PECSIP. The second trend, successful adoption of private AI. Pexiv continues to demonstrate strong net retention in the secure and custom segments. A key growth driver is our private AI offering, which is gaining significant traction across justice and healthcare sectors globally. A great example is one of the world's largest healthcare organizations who now adopted Pexip Private AI, resulting in a 30% upsell within an already major customer for Pexip. And thirdly, PECSIP's unique position for classified and mission-critical environments. PECSIP secured multiple wins across classified networks in Europe, as well as deployments at the highest US impact classification level, IL-7, underscoring our unique suitability for sensitive environments. A couple of large wins here as well. A Nordic nation now powers all their classified and above communication with PECSIP solutions across intelligence agencies, ministerial defense, and national security. And a US IT provider for defense, intelligence, and national security environments is now enabled with PECSIP at impact level four and above. And remember, TechSip is the only Microsoft certified vendor at aisle 4, 5, 6 and 7 that can meet the strict security regulations of the US government. And lastly, interoperability as a strategic differentiator. As enterprises and government institutions shift technology platforms, flexibility to deliver a consistent user experience remains essential. And recent wins prove our relevance and long-term competitive strength. A couple of large wins. One of the world's largest technology companies now uses Pexip for Google Meet across thousands of devices and meeting rooms worldwide as they changed video technology platform to Google. Another example is one of the world's largest biotech companies who have used Pexip Connect Standard for years and now transitioned to Pexip solution for their native rooms as they have changed the technology for devices in their meeting spaces. These four drivers are core to what makes Pexip unique, and they explain why we continue to win customer after customer in both secure and custom and in connected spaces. And lastly, I wanted to point out, as we came into this year with a solid pipeline across both business areas, we expect sustained strong traction in 2026 and beyond. And with that, I will hand it to Øystein for the financial details. Øystein?

Thanks a lot, Osman. For annual recurring revenue, as Trond mentioned, we increased our growth to 16% overall, up from 12% out of Q3. This is a combination of continued strong growth in secure and custom at 25% per year, and connected spaces having a great quarter, delivering 10% growth year on year. The great growth comes from customers in enterprise, government, healthcare, and defense, and in particular, from the Americas. In terms of net retention and new sales, Connected Spaces saw an increase of 8.6% in the quarter, driven by strong new sales. The improvement compared to previous quarters was in particular from a couple of large customers that closed in the quarter. Secure and Custom continues to see strong growth, delivering 5.4% in the quarter and from a combination of strong new sales as well as positive net retention. Churn was slightly higher this quarter, as we saw a low renewal rate for support contracts in Asia. That had an impact on churn overall. Search customers are a small part of our ARR base, hence we expect this to be more of a one-time event. In terms of the P&L, recognized revenue came in in line with last year. This is mostly due to the 10% decline in the US dollar to Norwegian kroner exchange rate, impacting our software revenues. as well as a software deal slipping from Q4 and being delivered in Q1 of 2026. In US dollar terms, revenue growth was 10%. For the year, revenue growth is in line with the ARR growth going into this quarter, while the contracts closed in Q4 will have revenue impact from Q1 onwards. EBITDA increased in the quarter, benefiting from the same currency development as it also reduces our costs. And for the year, we came in at an EBITDA margin of 26%, up from 18% in 2024. And the sum of our ARR growth and EBITDA margin is now at 42 for the year versus our long-term ambition of more than 40. On costs, they were slightly down compared to Q4 of last year. Non-share-based salary expenses are down 11 million, while share-based compensation is up 9 million due to the share price increasing meaningfully during Q4. And other OPEX was down 3 million. Looking at the year overall, Pexip increased our revenues with 110 million NOC and managed to convert 100% of that into incremental EBITDA. And this really shows the scalability of our software business, combining double-digit growth with good cost control. The EBITDA of 316 million resulted in a free cash flow for the year of 354 million, helped by a strong Q4. Q4 came in with a free cash flow of 72 million NOC, an increase of 51 million compared to Q4 of 2024, with most of the improvements resulting from a better working capital development. Looking at the rest of the P&L, depreciation is in line with previous quarters and continues to be down year on year, while net financials is down compared to Q4 of 2024 due to lower gains on foreign exchange differences. In total, our profits before tax came in somewhat above 2024 with 87 million Norwegian kroner. To summarize the year, we grew revenues with 10% and had no significant changes to either of the cost categories above EBITDA. Depreciation is 26 million, not lower, and hence our EBIT margin has crossed 20% for the first time and came in at 21%. Lastly, an update on reporting. Pexip is currently reporting our annual recurring revenues in US dollars, as that is the primary currency we use with our customers. To make reporting more consistent and remove noise from currency fluctuations, we intend to consolidate all financial reporting using US dollars in 2026, starting from Q1. We will provide pro forma historic figures for 2023 to 2025 in April, before the first report in the new reporting currency comes out in May. With that, I hand it back to Trond.