Pexip update Q1 2020

While we will be doing our full Q1 report in May, given the Covid-19 situation we would like to give you a quick update on the State of the Union in general and Q1 bookings specifically.

The last weeks of Covid-19-related effects
on society are serious and affecting people
and organizations globally. While Pexip, as an organization, is not immune to these effects, there are likely few companies on the planet that are better prepared than we are, given
our strong culture for working on video – and using our own technology. So, for all practical purposes, operations are as normal as possible.

What is not normal, is the demand from customers and partners. Since the beginning of March, the peak traffic for our cloud service has grown more than 7 times, many of our largest service providers and self-hosted customers have multiplied their capacity, and we have many more daily incoming customer requests. The Pexip team has been flat out these weeks to support partners and customers. In particular, the team has focused efforts on health care providers and governments globally.

For our business, this has further given tailwind to an already strong momentum from last year. Q1 2020 finished with a significant increase in delta annual recurring revenue (DARR) of 9.5

MUSD. This gives a contracted annual recurring revenue (ARR) of 56.7 MUSD at the end of Q1, which is 50% YoY growth compared to 32% in Q4 2019.

A significant part of the growth comes from increased demand from existing customers. At the end of Q1, Pexip had a Net Retention Rate of 113% for the previous 12 months, up from 99% in Q4 2019.

10% of the Q1 DARR represents increase in capacity on short-term commitments. Some of this capacity might not be needed when returning to the “new normal”.

Pexip will not generally provide forward looking guidance and the current COVID-19/macro situation makes forecasting the year as a whole difficult. That said, we believe that the current and post-Covid-19 situation will continue to drive video usage and adoption.

Thank you for your continued support of Pexip.

Odd Sverre Østlie CEO

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