Delivers 64% year-on-year growth in Annual Recurring Revenue
Oslo, Norway - August 12th, 2020
The video communications provider, Pexip, today presented its Q2 earnings, reporting an increase in Annual Recurring Revenue (ARR) of USD 9.1 million during the quarter, which is 3.8X the corresponding figure in Q2 2019 and the best Q2 in the company’s history.
This resulted in a contract base measured in ARR of USD 65.8 million, giving a year-on-year growth in ARR of 64%. Due to strong sales, Pexip delivered revenues of NOK 163 million in Q2 2020, up 98% from Q2 2019. Adjusted EBITDA was NOK 40.4 million (25% of revenue), up from NOK 11.6 million (14% of revenue) in Q2 2019. The company is tracking ahead of its plan to reach USD 300 million in ARR by 2025.
In Q1 2020, Pexip reported a significant increase in sales to existing customers as companies expanded their use of video communication in response to Covid-19. This increased usage amongst existing customers continued into Q2 2020 but was amplified by a larger share of revenues from net new business than in Q1 2020, with approximately 3/4 of the year-on-year growth originating from net new customers. The remaining 1/4 originated from increased sales to existing customers, giving a Net Retention Rate in Q2 of 118% (based on ARR) for the previous 12 months, up from 113% in the previous quarter.
In May, the company was listed on the Oslo Stock Exchange, raising net proceeds of NOK 1.1 billion and facilitating an equally sized secondary transaction. The company significantly increased its investor base, both in the number of institutional and retail investors and their geographical distribution. Pexip secured a strong cash balance with the IPO for further growth and development. The team's expansion has already begun, and at the end of Q2, Pexip had 250 employees, up 59% year-on-year.
“In Q2, we saw a strong increase in net new sales. We also continued to increase our Net Retention Rate, demonstrating that we are successfully helping our existing customers make the most of their investments, ensuring customer satisfaction. We believe that our unique user experience and range of deployment options, combined with our focus on stringent data protection, position us well for continued success,” said Odd Sverre Østlie, CEO of Pexip.
“Due to the Covid-19 situation, we have seen a significant shift in how people and organizations perceive and use video communication tools. We believe this has set a move to a hybrid solution where large organizations will enable their employees to combine remote and office work, utilizing video communication solutions in both locations. Pexip is ideally positioned to meet the needs of organizations facing this new situation,” said Michel Sagen, Chairman of the Board of Pexip.
Q2 2020 Financial Highlights in Summary:
- Subscription base measured in Annual Recurring Revenue of USD 65.8 million, giving a year-on-year growth in ARR of 64%
- Quarterly revenue of NOK 163 million, up 98% year-on-year
- Revenue Net Retention Rate of 118% (based on ARR) for the previous 12 months, up from 113% in Q1 2020
For questions, please contact: Øystein Hem, CFO, +47 992 34 596