News Apr 6, 2020 4 min read

Pexip announces record high sales growth

Gillian K. Dalslaaen

Apr 6, 2020 4 min read

Gillian K. Dalslaaen

An outstanding Q1 2020 builds on strong 2019 results

The video communications provider, Pexip, announced a record 50% year-on-year growth in contracted annual recurring revenue (ARR) after the first quarter of 2020, further enhancing the recently reported growth of 32% in 2019. Q1 2020 finished with a significant increase in delta annual recurring revenue (DARR) of 9.5MUSD, giving a total contracted annual recurring revenue (ARR) of 56.7 MUSD.

A significant part of the growth comes from increased demand from existing customers. Pexip experienced a Net Retention Rate in Q1 of 113% (based on revenue) for the previous 12 months, up from 99% in Q4 2019.

The Company reports that the current Covid-19 situation further spurs the strong results and momentum from 2019 as more and more companies turn to video communication to enable business continuity. Pexip has seen a 7 x peak traffic growth on its service in the past month alone. This increase in capacity demand comes from a mix of existing users and new customers.

In particular, there has been an increased demand from healthcare providers and governments globally who need secure video communication. Pexip believes that the current change in working behavior with more home offices, remote consultations, and conferences will continue to drive the usage and adoption of video beyond the Covid-19 crisis.

“Last year was by far the strongest so far, not only financially, but also in the technological development of our products and services and the addition of new customers globally. One of the things we are most proud of is customer satisfaction and our steadily increasing Net Retention Rates. This tells us that some of the world's largest companies are long-term faithful users of our unique technology by renewing their relationships with us.

This makes us proud but also humble and motivated to develop our technology further. We believe that our unique user experience combined with our privacy and deployment options position us well for future success,” said Odd Sverre Østlie, CEO of Pexip.

“We are now witnessing a dramatic increase in the use of our solutions worldwide because of the current Covid-19 situation. This is not a pleasant situation for anyone, but it’s good that our technology can help our customers, whether in the private or public sector. We see that the Pexip solution is enabling our users to fulfill their tasks best during these challenging times,” said Michel Sagen, Chairman of the Board of Pexip.

In 2019, Pexip became a leading global video conferencing solution player. Pexip serves enterprise and public sector customers across the globe, including 15% of the Global Fortune 500. The company has over 200 employees in seven offices in 18 countries across three continents. Fifty-five percent of subscription revenue comes from EMEA, 33% from North America, and 12% from APAC.

2019 / Q1 2020 Financial Highlights in Summary:

2019

Total revenue of 370 MNOK, a growth of 32% from 2018
Earnings of 76 MNOK, up from 32 MNOK in 2018, which corresponds to an EBITDA margin of 21%
Gross Margin of 95%
Contracted Annual Recurring Revenue of 47 MUSD, a growth of 11.7 MUSD
Customer Net retention Rate (% of ARR) of 99%

Q1 2020

Contracted Annual Recurring Revenue of 56.7 MUSD, up 50% from Q1 2019
Q1 Growth in Annual Recurring Revenue of 9.5 MUSD
Customer Net Retention Rate of 113% for the previous 12 months, up from 99% in Q4 2019

About Pexip

Pexip simplifies complex video conferencing to empower teams to meet, regardless of location or technology. Our scalable, cloud-native platform enables high-quality video meetings, interoperability with Microsoft and Google solutions, and video system device registration.

Customers can deploy Pexip as a hybrid or service on their own privately hosted servers in their cloud subscription (Azure, Google Cloud, or AWS). With diverse APIs, Pexip can be customized to fit customers’ unique needs. The solution is sold through 300 channel partners in 75 countries and used in over 190 countries.

For questions, please contact:

Øystein Hem, CFO, +47 992 34 596