Annual Report
2022
Pexip’s 2022 Annual Report
2
Highlights About Pexip Statement from the BoD Corporate Governance Financials Annual Report 2022
Table of
Contents
About Pexip
7
Highlights
3
#WeArePexip9
Pexip in brief7
Key figures
3
Letter from the CEO
5
Pexip as an investment
6
Our journey8
The Pexip Way11
The Pexip offering13
Market12
Strategy and targets16
Board of Directors43
Business model17
Statement from the
Board of Directors
20
Statement of Corporate
Governance (NUES)
32
Financials
44
Customers15
Executive Management 42
18 Sustainability
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Annual Report 2022About Pexip Statement from the BoD Corporate Governance FinancialsHighlights
Key figures
867 MNOK
revenue 2022
89%
gross margin
99.9%
satisfaction on 7300 support tickets
869,856
automated test cases
99.969%
technology uptime
100 MUSD
ARR 2022
About Pexip
Use of video has exploded in recent years, as
organizations have become accustomed to
collaborating digitally and capturing the benefits
of hybrid work. Pexip delivers video conferencing
software platforms that are secure, customizable
and interoperable, which are designed to meet the
demanding requirements of large public sector
organizations and enterprises.
Founded in Norway in 2011 to help the world
embrace the full potential of video, we have grown
into becoming a global video technology company.
We have 330 employees across 26 countries. In
2022 Pexip reported revenues of NOK 867 million
and ARR of USD 100 million.
2018
215
370
679
806
867
2019 2020 2021 2022
Revenue (MNOK)
2022
2018 2019 2020
2021
32
76
56
-124
EBITDA adjusted (MNOK)
-184
20222018 2019 2020 2021
161
182
361
329
535
Employees
2018
100
2019 2020 2021 2022
36
47
82
106
Contracted Annual Recurring
Revenue (ARR, MUSD)
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Annual Report 2022About Pexip Statement from the BoD Corporate Governance FinancialsHighlights
CEO letter
2022 was a year of transition and learning for Pexip. We sharpened our focus and made
strides towards returning to a healthy operating model. During the year, we underwent
significant change processes to get back to growth, and I am incredibly impressed
and grateful for the willingness of our teams to adapt and evolve. In parallel, we also
strengthened the relevance of our core product offerings, and maintained our strong market
position. We enter 2023 with a robust platform, thanks to our technology and our talented
teams, and with a positive outlook for the future.
As we look back on 2022, we see a year of
macroeconomic and geopolitical uncertainty
and concerns, largely driven by the Covid-19
pandemic, the war in Ukraine, and a global economy
in transition to a “new normal”. Despite the
challenging environment, digitalization continues
to reshape industries and drive competitive
advantages for companies. Video has emerged as an
increasingly important part of digital transformation
journeys – as a powerful tool that makes workflows
more efficient, creates learning opportunities,
and improves how we connect and relate to each
other. From corporate video meetings to doctor
appointments to courtroom appearances, video is an
integral part of our daily lives.
For Pexip, this is what our technology was made
for. And it is why we are dedicated to creating
solutions that are highly relevant for our customers,
whether you are a healthcare provider or a national
judicial system. Our unique capabilities within
interoperability, security and customization
possibilities make ‘video everywhere’ a reality no
matter the industry, the device or the connecting
technologies. This past year, we released several
new products and features to empower and support
our customers on their digitalization journeys,
always prioritizing their data security.
At Pexip, we take pride in our culture, our people,
and our organization. I am proud of how we came
together to face our challenges head on throughout
2022. To be able to successfully navigate such
significant organizational transformation in such
a short period of time says something about the
culture and the quality of our people, and I am
deeply impressed and grateful for their willingness
and ability to change.
Although the second half of 2022 was naturally
impacted by the operational changes we underwent,
we ended the year in a better position than ever.
This gives us a solid starting point for 2023, as we
continue to improve our market position and our
performance.
Thank you to our partners, customers, shareholders,
and teammates. Our mission to power video
everywhere is not one we can achieve alone. We rely
on an ecosystem of technology, strategic and sales
partners to innovate with us and serve customers
with the video technology they need to improve and
advance into the digital future. I look forward to
embarking on the next chapter in Pexip’s journey
along with all of you.
Trond K. Johannessen, CEO
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Annual Report 2022About Pexip Statement from the BoD Corporate Governance FinancialsHighlights
Pexip as an investment
Solid positioning for further growth
Pexip has a solid base of USD 100 million in annual recurring revenues (ARR) and a
clear path to profitable operations. Moving forward, Pexip has set targets for its future
performance, targeting EBITDA of NOK 100-150 million for 2023. This target is a
significant step for the company and represents its commitment to delivering strong
financial results to its shareholders. In addition to its EBITDA target, Pexip aims to achieve
an EBITDA cash conversion rate of 40% in 2023, which demonstrates its ability to generate
significant cash flow from its operations. This strong financial performance, combined
with the company’s position in high-growth markets and focus on the lucrative enterprise
segment, makes Pexip an attractive investment opportunity for those looking to invest in
the video communication industry.
Strong organization with value-driven culture
Pexip is led by an experienced management and technical team with a history of industry
defining innovation and key competence to propel our continued growth. Pexip also
has a unique company culture that values inclusivity and diversity. The company has an
open and inclusive work environment, where all employees are given equal opportunities
to succeed. This diverse and inclusive culture is seen as a competitive advantage, as it
allows Pexip to tap into the full potential of its workforce and better serve its clients.
Growing markets
Pexip is present in large, structurally high-growth markets with a unique position towards
the lucrative enterprise segment . The company has positioned itself to take advantage of
the rapid growth in these markets, especially within secure, customized solutions. Pexip’s
focus on the enterprise segment gives it a unique advantage, as this segment typically
has a greater need for robust and reliable communication solutions. Pexip’s strategy is to
continue expanding its presence in these markets, leveraging its unique position to drive
growth and increase its market share.
4
1
2
3
Proven and scalable business model with unique technology
Pexip is a certified video communication platform that offers a combination of unique
technology and industry partnerships to serve a broad range of companies and
governments around the world. The platform’s distinctive technology sets it apart from
its competitors, as it offers a level of quality, flexibility and security that is unmatched
in the industry. This makes Pexip an attractive option for companies and governments
looking for a robust and reliable video communication platform.
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Annual Report 2022Highlights Statement from the BoD Corporate Governance FinancialsAbout Pexip
Creating accessible
and meaningful
connections between
people & technologies
to advance a safer,
greener and more
connected world.
About Pexip
Pexip in brief
Pexip is a global video technology company founded
in Norway in 2011. In a world driven by digitalization
everywhere, we believe that video has the power
to create trusted connections, reinvent brands
and bring transformational ideas to life. Today our
video platform powers everything from ultra-secure
government meetings to personalized banking to
efficient hands-free work for many of the world’s
largest organizations.
Digital transformation and the broader technology
trends shape our roadmap and drive our industry
forward. When video is how work is done, security
and customization become essential. Pexip’s unique
and differentiated technology supports customers
on their journey to advance safer, greener, and to
more connected organizations. Pexip’s customers
are mainly large private and public organizations.
These are organizations for whom security, privacy
and data sovereignty are paramount. The need to
connect different platforms and devices is also of
utmost importance, as is the possibility to integrate
video into existing workflows and platforms to
create customized and branded solutions.
Our mission is significant; we are here to power
video everywhere and we need the best talents,
hearts, and minds to do so. Our culture builds on the
solid foundation of The Pexip Way. We are passionate
and curious people, loving what we do. Work is
not a place, but a meaningful part of our lives, and
something we look forward to every single day. The
Pexip HQ is in Oslo, Norway, and we have offices
in America, Europe, and Asia Pacific, with a robust
global partner network that supports more than
4,000 customers worldwide.
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Annual Report 2022
Powering video everywhere
As the world moves towards the digitalization
of everything, we envision a future powered
by video everywhere. And we have built our
technology accordingly, step by step.
Step 1: Make it interoperable
Since day one, we have made video work
on just about everything, ensuring that
people and technology can connect anytime,
anywhere, from the device of their choice.
Step 2: Safeguard everything
We have long understood that what happens
on video is important, often critical. This
information must be safeguarded, which is
why, for us, security is not just a feature. It is
what we do. Our technology has been tried
and tested for more than a decade in the
strictest and toughest security environments,
meeting the world’s toughest requirements
for privacy and data control.
Step 3: Never stop innovating
Video technology has the power to disrupt
industries, reinvent brands, and reimagine
how companies engage. We are committed
to giving companies and people a new way
to interact. A virtual court appearance.
A remote doctor-patient consultation
in an ambulance on the move. An online
mortgage consultation. An extended reality
maintenance inspection.
Video technology is what puts the human
touch back into our increasingly digital
lives. We have always been at the forefront
of the video evolution. We keep our eyes
on ‘what’s next’ and we are obsessed with
staying a few steps ahead, because that’s
just who we are. Now we are unleashing the
potential of a secure video experience across
industries, environments, and customized
to individual workflows. All to ensure that
the human touch is not lost in a sea of
digitalization.
Our journey
2017
Video interoperability solution for
Microsoft Teams and Skype for
Business Server launched, as
well as interoperability for Google
Hangouts Meet
2019
New company HQ
in Oslo opened
2020
Pexip listed on Oslo Stock Exchange
in the world’s first virtual IPO
2021
Pexip acquires Skedify to accelerate
the delivery of video enabled
business-to-consumer application
2022
Pexip appoints Trond Johannessen
as CEO
2012
Pexip AS (pre-merger entity) founded
Launch of the Videxio video
communication service
Business established in the United
States through Pexip Inc. (2012) and
Videxio Inc (2013)
2011
Videxio AS (pre-merger entity) founded
2013
Launch of the Pexip Infinity
software platform
2018
Merger between Pexip AS and
Videxio AS approved
Highlights Statement from the BoD Corporate Governance FinancialsAbout Pexip
Highlights About Pexip Statement from the BoD Corporate Governance Financials
Q1
• Pexip launches Enhanced Room
Management (ERM)
• Pexip launches Infinity release
V.27 with far-end camera control,
background blur, and authentication
integration
• Pexip hosts INSIGHTS Partner
events in Europe
• Pexip is listed on Microsoft Azure
Marketplace
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Annual Report 2022
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Pexip is founded on the three building blocks of Technology, Partner Ecosystem and Culture.
These are interrelated and Pexip’s culture is driven by people, technology, and possibilities.
The highlights of Pexip in 2022 are:
#WeArePexip
Q4
• Microsoft recognizes Pexip as SaaS
partner of the year
• Pexip launches Infinity release V.30
for Teams-like experience from
meeting room hardware
• Pexip launches Enhanced Guest Join
for Google Meet
• Pexip launches collaboration with
Team Aker Dæhlie’s BEYOND team
to promote equal opportunity and a
world championship mindset
Q3
• Pexip launches The Experience
Center for onsite and remote
customer briefings
• Pexip is selected to license its core
technology to one of the world’s
biggest SW applications
• Pexip launches Infinity release V.29
with Citrix support and optimized
layouts for content-sharing
Q2
• Trond K. Johannessen takes the
helm as Pexip’s new CEO
• Pexip launches Virtual Courts – a
true-to-life digital courtroom
• Pexip launches Engage – for high-
quality customer engagement
• Pexip launches Secure Collaboration,
a Pexip + Rocket. Chat solution
• Pexip launches Infinity release V.28
with layout switching and pre-
meeting content sharing
Highlights Statement from the BoD Corporate Governance FinancialsAbout Pexip
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Annual Report 2022Highlights Statement from the BoD Corporate Governance FinancialsAbout Pexip
The Pexip Way
Professional & Fun
We are committed to our partners and customers;
we are passionate and fun to work with; we strive for
excellence. We believe in what we do, and we let that
shine through in our interactions with colleagues,
partners, and customers.
No Bullshit
We say it as it is, with no hidden agenda.
We always speak our minds in a considerate
and constructive manner. We do what needs
to be done to help our colleagues, partners,
and customers. We stand for honesty and
integrity.
Freedom & Responsibility
We encourage initiative and innovation; we
are all leaders; we act like owners, and make
decisions that are best for Pexip. In other
words, we hire great people and empower
them with the trust and autonomy to do what
they do best.
One Team
We make each other better by respecting,
supporting and caring for each other. We
appreciate diversity and with more than
300 employees in 26 countries, diversity is in
our DNA.
Our company values are at the core of everything we do, and they define how we interact
with each other, our customers and our partners daily. They guide our business, our product
development, and our brand. As our company continues to evolve and grow, scaling the
Pexip Way is critical to our success. Since day one, Pexip has had an open and inclusive work
culture with equal opportunities for all. We are proud to represent a diverse workforce and
we see diversity as a competitive advantage.
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Annual Report 2022Highlights Statement from the BoD Corporate Governance FinancialsAbout Pexip
vendors to seamlessly communicate and process
data.
The videoconferencing market consists of players
such as Cisco Webex, Zoom, Google Meet and
Microsoft Teams. Today, the players with significant
reach are lacking the ability to seamlessly
interoperate with one another. If a meeting is
held on Microsoft Teams, the participants join the
meeting using the Teams application. Joining a
Teams meeting from a meeting room, however, is
not always possible, it may be difficult or provide a
reduced user experience.
With Pexip, users can join meetings from any device
and any location without downloading or installing
software. Regardless of video meeting technology,
productivity tool, platform, calendar, or device, users
can connect the tools and workflows they choose
and experience native integrations with Google
Meet and Microsoft Teams.
Pexip addresses the market for interoperability with
unique solutions sold via our business partners as
well as through the licensing of Pexip technology to
other vendors to enhance their customer offering.
Secure, customized solutions
Security and customization are paramount when
video is how work is done. Organizations need to
build protected and resilient solutions that can
withstand threats and that can handle situations
when failure is not an option. With cyberattacks on
the rise, confidential business information, critical
services, and infrastructure are all at risk. The
market is now experiencing:
• Regulations for privacy and data
control increasing severely, especially in Europe
• The demand for zero-trust architectures
• Robust business continuity planning
For industries such as healthcare, finance, judicial
and government, video meetings are a space for
sharing sensitive or classified information. Trust
is an absolute requirement. There is no room for
error; call data records cannot be shared, meeting
room security cannot be breached, and real-time
connections cannot be lost.
Overview
2022 marked a year of change for our customers
and partners. The game-changing pandemic that
accelerated digitalization, the inflation impacted
buyer behavior, and geopolitical uncertainty that
changed customer needs have all fundamentally
transformed how organizations think, act, and run
their businesses. The evolving market conditions
present Pexip with growth opportunities in
the areas of interoperability, security, and
customization. They also provide opportunities to
adapt our business model.
Customers continue to explore digitalization to
expand and accelerate growth. Anything that can
be digitalized will be digitalized, and anything that
can be done remotely will be done remotely. As
the trend of hybrid working situations continue,
the need to connect people working from home
with people in meeting rooms grows, as well as
connecting frontline workers’ wearable devices
with meeting rooms or meeting applications. And
everyone is seeking uncomplicated experiences
with the tools of their choice. The complexity in
this market is driven by different vendors requiring
interoperability between technology solutions for
optimal user experiences.
Customers demand trusted digital connections.
The geopolitical situation has caused the market
to become more aware of where critical data is
stored and who has access to it. With cyberattacks
on the rise and stricter market regulations for
privacy and data control, organizations are
evaluating the risks of their communications
solutions to provide users with the safety they
demand.
The way businesses access and acquire software
is evolving rapidly with buyers demanding
simplicity and empowerment to transact on digital
marketplaces like Azure Marketplace, Google
Market, Amazon Business, and more. A market in
flux requires Pexip to also innovate its business
model to secure scale, profitability and future
readiness.
Interoperability solutions
Interoperability is the ability of applications,
devices, and services from different technology
Market
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Annual Report 2022Highlights Statement from the BoD Corporate Governance FinancialsAbout Pexip
Pexip’s offering covers different market demands
The Pexip offering
Connected Spaces:
Pexip solutions for interoperability
Today there is a wide range of different video
solution providers, as well as a great deal of
different hardware used in meeting rooms. Pexip
is the only independent software provider that
can seamlessly bridge between the different video
meeting platforms and the meeting room devices,
allowing flexibility and provide customers with the
user experience of their choice.
With Pexip, users can join meetings from any device
- laptops, smartphones, and conference room
systems - from any location without downloading or
installing software. Regardless of video technology,
productivity tool, platform, calendar, or device,
organizations can connect the tools and workflows
already in use and utilize native integrations with
Google Meet and Microsoft Teams.
The results are:
• High quality user experiences
• Ease of management
• Enhanced return on investment in existing
infrastructure
• Reduction in e-waste as organizations extend
the lifetime of their video equipment
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Annual Report 2022Highlights Statement from the BoD Corporate Governance FinancialsAbout Pexip
Pexip technology advantage is based on:
1 - Core transcoding
• Processing happens in the network and not on the device
• Facilitates interoperability across platforms and devices
• Works well with devices that run on batteries or have limited processing capacity (thin
clients, such as wearables)
2 - Infrastructure agnostic
• Enables complete control of data & business continuity
• Perfect for organizations with a need to bypass the internet or operate with a sovereign
cloud
3 - Built as a platform (not as an application)
• Enables complete customization
• Ideal for new applications of video in sectors such as healthcare, video banking and
virtual courts
Secure, customized solutions
Secure Spaces and Video Innovation make up Pexip’s
solutions for enabling secure and custom solutions.
We offer several solutions to enable privacy, data
sovereignty and business continuity. The solution is
modern, on-premises collaboration solutions that
put your organization back in control of all of your
data, including its location. And we offer meeting
options that work no matter if other solutions are
down, ensuring business continuity. Use the cloud
of your choice or deploy on self-hosted solutions to
ensure complete data sovereignty.
Pexip offers solutions that are created for your
workflow, built as a platform to fit your need, with
the ability to embed video directly into your apps
to create a seamless, frictionless experience, and
with no downloads or plugins needed. Alternatively,
customers can build their own video platform, and
connect with existing incompatible equipment,
protocols, and integrations.
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Annual Report 2022Highlights Statement from the BoD Corporate Governance FinancialsAbout Pexip
Customers
In a world driven by digitalization
everywhere, video can create trusted
connections, reinvent brands, and bring
transformational ideas to life. Pexip
video technology is here to build resilient,
future-proof communication solutions
that help organizations accelerate their
digitalization goals.
To provide customers with the absolute best
solutions, we work with a worldwide ecosystem of
channel partners, technology partners, and direct
sales teams to co-create customer solutions at
scale.
Pexip technology allows customers to enhance
and elevate their current communication solutions
to perform better, and to meet the growing needs
of their users, or their industry’s requirements.
Pexip also enables customers to design secure and
fully custom solutions specific to their business.
Workflows designed by Pexip allow customers to
choose their preferred user experience or workflow
tools. We simply embed Pexip inside and make what
they use work better. User satisfaction increases
when customers can use what they like, know, and
prefer.
Pexip Customers
Large organizations are ready to embed video into
business workflows to become more efficient. As a
result, video is becoming a mission-critical part of
business operations, reaching outside traditional
office walls to remote workers and, in some cases,
completely replacing former working methods.
For example, online banking, digital courtrooms,
virtual care, and meeting with public office agents
are digital services. And users expect a delightful,
trusted, and seamless experience. So where does an
organization start to become that effective? Enter
Pexip.
We aim to maintain a leading, global position as
a video technology platform vendor, supporting
customers with secure and customized solutions.
The market is vast, and our partnerships are
strengthening. As a result, our addressable market
is growing. We are reaching more customers and
creating stronger business outcomes.
Large organizations in the public sector
and enterprise
We sell to large government, healthcare, judicial,
finance, retail, manufacturing, and defense
customers. For judicial, Pexip offers a unique
solution. What sets Pexip apart is the true-to-life
user experience. Large organizations in the public
sector and enterprise select vendors that are leaders
in their industry and have high quality, security, and
regulatory compliance standards. They seek global
delivery capacity with total service responsibility.
In addition, these organizations seek excellent user
experience, documentation, and support.
Technology Service Providers
Pexip works closely with some of the world’s
largest service providers to create fully customized
solutions for large public sector organizations. In
the United States over 50% of virtual care calls run
on Pexip through our close work with the Veterans
Affairs and several US service providers. We also
serve smaller technology developers looking to
create solutions that are enhanced by adding a high-
quality video capability.
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Annual Report 2022Highlights Statement from the BoD Corporate Governance FinancialsAbout Pexip
Pexip’s mission is to power video everywhere. We do that through developing software
technologies within video communications and in selling this technology to partners and
end-customers. Due to the capabilities of Pexip’s technology, we serve several distinct
markets with our solutions.
Within the video infrastructure and
interoperability market, Pexip has a clear
leadership in interoperability between different
video platforms. As the only independent provider in
this segment, we are well positioned to create and
develop partnerships with other industry players,
such as Microsoft and Google. Pexip is serving
this market through system integrator partners
that often serve the customers’ full collaboration
needs. This is a mature market with clearly defined
customer needs, and we are focusing on developing
our leadership in this space and maintaining a
healthy and profitable business.
Within the market for secure and customized
video solutions, Pexip is well positioned for growth
with our unique capabilities to deliver a self-hosted
video platform which is easy to integrate and is
interoperable with a range of video technologies.
This is a fast-growing market with mostly
public sector customers, and we are investing
in strengthening our technology leadership and
focusing our go-to-market activities towards public
sector customers and system integrator partners
that operate in this market.
Overall, we target a +20% ARR growth within
secure and customized video solutions, with a flat
to positive development in total revenues. We target
NOK 100-150 million EBITDA with NOK 40-60
million in free cash flow in 2023.
Strategy and targets
Profitability
NOK 100-150 million EBITDA with NOK 40-60 million in free cash flow in 2023
Revenue
ARR growth within secure and customized video solutions, with a flat to positive development in total
revenues
Leading market position
Technology leader in core markets
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Annual Report 2022Highlights Statement from the BoD Corporate Governance FinancialsAbout Pexip
The software is delivered both as a software
product for customers to run and operate
themselves, and as a Software-as-a-Service (SaaS)
offering operated by Pexip. Both offerings are
delivered as a recurring subscription-based model,
and the vast majority of Pexip’s revenue is recurring
revenue from subscriptions.
Pexip serves a global market and has customers
across the world with its main focus in Europe,
North America and the Asia Pacific region. Pexip
is serving its customers through its own high-
touch sales and technology experts as well as a
global community of authorized channel partners
and service providers. These channel partners,
which include companies such as Orange, the
global technology and business solution provider,
ConvergeOne, the US IT service provider and Kinly,
the audio-video specialist integrator, provide Pexip
solutions to their existing and new customers and
possess the technical knowledge and relationships
to manage those customers throughout the sales
process, from IT business strategy development to
trials to onboarding and support. This strategy also
provides the most scalable in-country sales and
support capability such as local language, time zone
coverage, and so on.
#WEAREPEXIP
Business model
The software is developed by Pexip’s own employees, and the Intellectual Property is
protected by a set of patents and proprietary know-how.
Strategic Partners
Solution partners
Customers
Products &
components
Integration &
solutions
Customer
requirement solved
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Annual Report 2022Highlights Statement from the BoD Corporate Governance FinancialsAbout Pexip
Sustainability at Pexip
Pexip aims to create sustainable value through a
business strategy that fully integrates ESG at its core.
Video communication has become a crucial tool
in safely connecting patients with healthcare
providers, making public services more accessible
to citizens, providing better customer service, and
facilitating business continuity by enabling both
internal meetings and customer-facing interactions
to securely happen from anywhere. This has
consequences for all aspects of ESG and for Pexip’s
sustainability contributions.
Pexip’s mission is to power video everywhere.
Organizations have seen that video communication
provides a viable alternative to travel, whether that
is for meetings or for other business processes or
healthcare and government services. Organizations
need to look carefully at who they are willing
to share their data with and who controls the
technology. With hybrid working becoming
ingrained in companies’ cultures, knowledge
workers will continue to work from a variety of
locations and are dependent on having a video
communication platform that lets them do this in
both a simple and secure way.
Pexip’s Sustainability Report
Pexip’s Environmental, Social and Governance (ESG) work is presented in the 2022
Sustainability Report. The report provides an overview of Pexip’s material ESG topics and
its performance metrics for 2022. The report has been prepared in reference to the Global
Reporting Initiative (GRI) Standards.
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Annual Report 2022Highlights Statement from the BoD Corporate Governance FinancialsAbout Pexip
Strategic Focus Areas
The Sustainable Development Goals (SDGs) are a
collection of 17 interlinked objectives designed to
serve as a “shared blueprint for peace and prosperity
for people and the planet now and into the future”.
The SDGs were adopted by all UN member states
in 2015 and represent an urgent call for action by
all countries in a global partnership to make the
world a better place by 2030. A key component of
the SDGs is the principle of collaboration for their
achievement, including between Government, Civil
Society and Business.
We have identified the following SDGs as ones Pexip
can contribute to:
• Data security and privacy
• Talent attraction and retention
• Greenhouse gas emissions and energy use
• Ethical business practices
• Diversity and equal opportunity
• Digital inclusion and positive industry impacts
• Health, safety and wellbeing
• Supply chain management
• Intellectual property rights
Pexip is actively addressing critical areas, such as
diversity. We realize that, as for the IT sector as a
whole, we have considerable work to do to address
gender diversity, inclusion and equal opportunity.
Pexip’s Diversity Taskforce continues to assess,
plan, and implement initiatives to ensure diversity in
recruitment, succession planning and leadership.
We have conducted a human rights due diligence
assessment for its suppliers in compliance with the
Norwegian Transparency Act. The account of this
can be found in the sustainability report.
For more information, the full sustainability report
can be downloaded at investor.pexip.com.
In addition, we have established baseline measures for the following material topics:
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Annual Report 2022Highlights About Pexip Corporate Governance Financials
Statement from the Board
of Directors
2022 has been a transition year for Pexip. During the year, Pexip has been through a
successful organizational restructure and downsizing as a part of the implemented cost
reduction program. Pexip has transitioned back to being a dedicated technology company,
with focus on the unique technology and offering Pexip delivers to the market.
We continue to see huge opportunities in Pexip’s markets, with increased awareness
of security and sustainability among large organizations. Companies and public sector
organizations continue to increase their investments to improve and secure digital
communication and interaction both with their customers and internally, and Pexip is in a
good position to support it’s customers with this. The overall video technology market is
large and growing, and we see the emergence of several niche markets where we believe
Pexip really has an edge and the technology to be a key player.
Market environment
Pexip’s ambition is to be the industry leader within
its core markets, which for Pexip is the market for
video infrastructure and interoperability, and the
market for secure and customized communication
solutions.
Within video infrastructure and interoperability,
Pexip believes that technology should work with
existing workflows and systems. With Pexip’s
solutions, users can securely join meetings with
any device and from any location, without the need
for expensive hardware upgrades, downloads or
software installations. With Pexip, organizations
can connect the tools and workflows already in use
and utilize native integrations with Google Meet
and Microsoft Teams, as well as SIP interoperability
to a large range of other platforms. The result is an
optimal user experience, ease of management for
administrators, enhanced return on investment on
existing infrastructure and a reduction in e-waste
as organizations extend the lifetime of their video
conferencing equipment and upgrade it in the most
efficient and sustainable way possible.
Within secure and customized solutions, the
potential use cases of video stretch far beyond
traditional videoconferencing and Pexip is at
the core of this, enabling organizations to make
the most of these possibilities. Video now plays
a critical role in critical communication inside
organizations, safely connecting patients with
healthcare providers, making public services more
accessible to citizens and facilitating business
continuity by enabling both internal meetings and
customer-facing interactions to securely happen
from anywhere. Organizations are impacted by
the heightened global security focus, driven by
both increased geopolitical complexity and cyber
vulnerability, and increasing awareness around
topics such as data security and data sovereignty.
It is becoming more important to have control
over your own data, in addition to the ability to be
compliant with new laws and regulations. Pexip
can deliver solutions that allow organizations
to maintain full data control with an integrated
chat, video and file-sharing solution to ensure
secure communications. In addition, with Pexip,
organizations can use application programming
interfaces (APIs) to build custom branded
experiences and integrate with their chosen
technology and workflows to provide video-enabled
consultations that are easy to join from any device
or location, and that remain secure.
Organization and management
During the year, the Board of Directors had the
pleasure of welcoming Trond K. Johannessen as
Pexip’s new CEO, succeeding Øystein Hem, the
interim CEO since September 2021, and who
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Annual Report 2022Highlights About Pexip Corporate Governance Financials
returned to his role as the CFO in May 2022. In
July, Ian Mortimer succeeded Nico Cormier as the
CTO. In November, Helge Hoff Hansen joined the
executive management team as SVP Strategy.
In Q2, a cost reduction program was implemented
as part of an accelerated plan to return to
profitability. Based on this, Pexip had to perform
a resizing of the organization during the year,
which was executed efficiently and successfully.
The current team is down ~40% from the peak in
mid-Q2. The current organization is designed to
further execute on Pexip’s revenue strategy going
into 2023 and deliver on the company’s updated
profitability targets. Pexip is entering 2023 with a
robust platform, reflecting the technology and team,
and with a positive outlook for the future.
Financial review
(Figures in brackets = same period prior year or
relevant balance sheet date).
For the full year (FY) of 2022, Pexip’s revenue was
NOK 867.1 million, up 8% from FY 2021. EBITDA
adjusted for restructuring costs was negative NOK
184.0 million, reflecting a negative 21% EBITDA
margin.
Consolidated revenue was NOK 867.1 million for full
year 2022 (NOK 805.5 million). Pexip operates with
two main products areas. The Pexip self-hosted
software product area, which mainly consists
of sales from software license sales and related
maintenance contracts, and the Pexip as-a-Service
area, which consists of sales from Pexip’s public
cloud service. Revenues from Pexip as-a-Service
was NOK 408.2 million (NOK 314.6 million), up
30%. Revenue from self-hosted software was NOK
458.9 million (NOK 491.0 million), down 7 %.
Europe, Middle East and Africa (EMEA) was the
largest sales theater, accounting for NOK 471.9
million (NOK 439.1 million) representing 54% of
group revenue in 2022 (55%), followed by Americas,
accounting for 316.9 million (NOK 299.9 million)
representing 37% (37%), and Asia-Pacific (APAC),
accounting for NOK 78.2 million (NOK 66.4 million)
representing 9% (8%).
Cost of sale amounted to NOK 93.8 million (NOK
76.9 million), reflecting a gross margin of 89%
(90%). Cost of sale increased due to higher hosting
and network cost related to higher usage of Pexip
as-a-Service, as well as a shift towards cloud
compute from investing in own hardware. This is
driven by a modernization of the Pexip as-a-Service
platform, intended to increase service robustness
and ensure a better long-term cost structure.
Operating expenses consist mainly of salary and
personnel expenses and other operating expenses.
Salary and personnel expenses amounted to NOK
719.7 million in 2022 (NOK 634.4 million), which is
83% of revenues in the period (79%). The increase
is mainly due to growth in employees over the last
twelve months, however, with significant reduction
in percentage of revenues compared to the first half
of 2022 at 110% of revenue and 91% of revenue in
YTD Q3 2022 with lower headcount towards the
end of the year.
Other operating expenses amounted to NOK 237.5
million (NOK 218.6 million) for 2022, which reflects
27% of revenue (27%). The increase in the period is
related to overall activity growth in the business, in
addition the reopening of physical events leading to
higher marketing and travel costs.
Other gains and losses related to restructuring
amounted to NOK 61.3 million (NOK 0 million). The
costs are related to the cost of the restructuring
executed in Q2 and Q4 2022, which reduced
headcount from 571 during mid Q2 2022 to 329
continued positions at the end of Q4 2022.
Adjusted earnings before interest, tax,
depreciation and amortization (Adj. EBITDA)
amounted to negative NOK 184.0 million for
2022 (negative NOK 124.3 million), reflecting a
negative 21% adj. EBITDA margin (negative 15%).
The adjustment relates to the restructuring costs.
EBITDA including restructuring costs was negative
NOK 245.3 million, reflecting a negative 28%
EBITDA margin.
Depreciation, amortization and impairment costs
were NOK 115.1 million for 2022 (NOK 73.7 million).
Net financial income was NOK 43.6 million in
2022 (NOK 2.8 million) and was mainly related to
currency gains.
Profit before tax was negative NOK 316.8 million
in 2022 (negative NOK 195.2 million). Profit after
tax was negative NOK 262.2 million (negative NOK
157.3 million).
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Annual Report 2022Highlights About Pexip Corporate Governance Financials
Financial position
Pexip continues to be well capitalized as
the company has executed and initiated a
set of activities to improve cash flow. Total
assets amounted to NOK 2,087 million (NOK
2,388 million at the end of 2021), and total equity
amounted to NOK 1,597 million (NOK 1,908 million).
Current assets amounted to NOK 679 million
(NOK 1,067 million). Trade and other receivables
decreased to NOK 199 million (NOK 218 million).
Cash and cash equivalents decreased to NOK
419 million (NOK 804 million), driven by a negative
operating cash flow, M&A and buy-back of shares.
Non-current assets increased to NOK 1,408 million
(NOK 1,321 million). Contract costs increased to
NOK 286 million (NOK 262 million).
Total liabilities were at NOK 490 million (NOK 479
million). Of this, NOK 4 million are borrowings (NOK
6 million).
Current liabilities increased to NOK 415 million
(NOK 376 million). Of this, NOK 231 million are
contract liabilities (NOK 202 million)
Non-current liabilities amounted to NOK 75 million
(NOK 104 million), the reduction was mainly driven
by lower lease liabilities.
Cash flow
Pexip had a cash flow from operating activities was
negative NOK 182.5 million for 2022 (negative NOK
155.3 million for 2021). The negative operating cash
flow was mainly impacted by a higher loss before
income tax of NOK 316.8 million (negative NOK
195.2million). The difference between operating
profit and cash flow from operating activities
is mainly due to depreciation, amortization,
impairment, net exchange differences, share-based
payments without cash effects and positive change
in the net working capital.
Cash flow from investing activities was negative
NOK 110.3 million for 2022 (negative NOK 98.8
million). The main driver is the purchase of a service
provider portfolio which was completed in Q1 2022,
as well as own software development.
Cash flow from financing activities was negative
NOK 121.0 million for 2022 (negative NOK 45.6
million).
In total, Pexip had a negative net cash flow of NOK
413.8 million for 2022 (negative NOK 299.8 million).
The currency gain in 2022 was NOK 29.2 million,
resulting in a negative cash flow of NOK 384.5
million (negative 296.8 million).
Outlook
In the long-term, Pexip believes that the market for
enterprise-grade video communication will continue
to increase due to widespread adoption and usage
of video communication and hybrid work, and
increased awareness of security and sustainability.
Pexip has unique video technology with capabilities
within security, interoperability and for self-hosted
deployments. This makes the company well-
positioned to win in its focused markets of video
infrastructure and interoperability , and secure and
customized communication solutions. This is the
foundation of the more focused strategy Pexip has
been executing on since late 2021, pursuing market-
leading positions through the Connected Spaces,
Secure Spaces and Video Innovation offerings.
The two main markets Pexip addresses have different
maturities and growth outlooks, and require different
execution strategies. From 2023 Pexip will focus its
business areas into two main areas: one comprising
Connected Spaces including legacy areas, and
the other comprising Video Innovation and Secure
Meetings. The rearrangement of the business areas
allows the operation and goals to be more focused on
the different needs in these two markets and enables
Pexip to maximize the potential of each. Pexip
targets growth of 20% in Secure Spaces and Video
Innovation, while estimating a stable development in
Connected Spaces.
With the current strategy Pexip has accelerated the
return to profitability through growth and a reduced
overall cost level, and the impact already realized in
Q4 2022 provides support for this ambition. Pexip’s
targets has been revised during the year, based on
the performance during the year and the uncertain
macroeconomic situation. In 2023, Pexip targets
flat to positive development in total revenues, with
an EBITDA of NOK 100 – 150 million for the whole
year 2023 and positive cash flow run rate out of Q1
2023. Going forward beyond this, Pexip will balance
growth and profitability.
Statement from the BoD
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Annual Report 2022Highlights About Pexip Corporate Governance FinancialsStatement from the BoD
These forward-looking statements are not
guarantees or predictions of future performance,
and involve known and unknown risks, uncertainties
and other factors, many of which are beyond our
control, and which may cause actual results to differ
materially from those expressed in the statements
contained in this section. Readers are cautioned
not to put undue reliance on forward-looking
statements.
Subsequent Events
There were no subsequent events after December
31, 2022.
Parent Company and Allocation
of Net Profit
Pexip Holding ASA is a public limited liability
company. It has 0 employees, and its activities are
limited to being listed on Oslo Børs and being the
parent company of Pexip AS. Pexip Holding ASA
had a loss of NOK 383.1 million in 2022 (NOK -10.2
million), which is mainly related to a write down of
the investment in daughter company Pexip AS of
NOK 404 million.
For 2022 Pexip had a negative net profit, however,
the company has taken steps to improve its cash
flow into 2023. The Company maintains a strong
balance sheet, and the Board will going forward
continuously assess cash distribution to the owners
against other available investment opportunities.
The loss for the year of the parent company,
Pexip Holding ASA, of NOK 383.1 million has been
allocated in its entirety to other equity.
Environmental, Social and
Governance
Pexip’s ambition within Environmental, Social
and Governance (ESG) is to run the business in a
responsible and sustainable manner over time, and
in a way that contributes to a positive, trust-based
relationship between Pexip, Pexip’s stakeholders
and society as a whole. Material topics included
in Pexip’s Sustainability Report were identified in
alignment with GRI’s materiality principle. Pexip
uses SASBs Software and IT Services Standard and
the disclosures contained within it to represent
material ESG topics for the company. All disclosures
from the Standard have been included in this report.
The Sustainability Report can be found on Pexip’s
webpage under https://investor.pexip.com/ and
includes the following material topics:
• Data security and privacy
• Talent attraction and retention
• Greenhouse gas emissions and energy use
• Ethical business practices
• Diversity and equal opportunity
• Digital inclusion and positive industry impacts
• Health, safety, and wellbeing
• Supply chain management
• Intellectual property rights
Reducing both Pexip’s and the customers’ impact
on the environment when using Pexip’s products
and services is an important focus for Pexip and
the Board, and it will become even more important
in the future. We consider Pexip’s operations
to have an overall positive effect on the global
environment. Pexip delivers videoconferencing
services, which can be used to reduce business
travel and commuting, thereby reducing carbon
emission, and improving the environment. Pexip’s
software also allows enterprises to increase the
lifetime of their technical equipment through
interoperability, giving the opportunity to
reduce e-waste. Pexip produces software and
software-as-a-service and does not use products
or materials which are harmful to the natural
environment in the production of its services.
Pexip uses waste sorting and recycling schemes
for supplies and materials.
The direct impact of climate change is not
expected to have a material impact on Pexip’s
financial performance and accounts in the short
term, as Pexip has a limited carbon footprint
and limited physical infrastructure which can
be impacted. In the mid-term Pexip expects
climate change awareness to have a positive
effect on revenue due to the positive nature of
videoconferencing when it comes to reducing
travel and commuting, improving the environment
as described above. Similarly, it may negatively
impact the cost of operations, mainly related to
data centers and compute due to increasing cost
of electricity.
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Annual Report 2022Highlights About Pexip Corporate Governance Financials
People and organization
Pexip aims to be a leading people-focused
organization in the industry and focuses heavily
on people and a culture of accountability and
performance. We rely on a diverse workforce
to succeed, and the goal is to offer an equal
opportunity, safe, and risk-free working
environment fostering individual growth and
enjoyment at work. There is a Diversity, Equity and
Inclusion (DEI) team working actively to promote
and improve topics within equality, diversity, and
inclusion within Pexip. The team comprises six
employees in Pexip, two male and four female,
across different positions and departments.
Pexip is an equal opportunity employer that
evaluates applicants and treats employees equally
regardless of an individual’s age, race, color,
gender, religion, national origin, sexual orientation,
disability, or veteran status. Pexip is committed to
create a diverse and inclusive environment at work
and is proud to be an equal-opportunity employer.
All qualified applicants receive the same level of
consideration for employment, and are made by a
hiring board including peers, HR and management
to challenge biases and provide a fair evaluation.
Promotion-processes and pay reviews includes
involvement from HR to ensure equal opportunities
for all. All employees are offered flexibility in work
locations, and the frequent use of video meetings
allow for the ability to work from home for increased
job flexibility that further facilitates a good work-life
balance.
Pexip has a leadership training program consisting
of 5 sessions, of which one is dedicated to the topic
One Team, where diversity and inclusion is a key
part. 25 people have participated in this training
in 2022. There are forums discussing gender,
neurodiversity and LGBTQ related topics, and a
discussion channel on slack for DEI related topics or
questions.
Employees and gender balance
At year end, the number of employees in Pexip in
permanent positions amounted to 329 (2021: 535),
of which 262 were male and 67 were female. The
employees are located in 26 different countries.
Pexip has offices in Norway, Sweden, Belgium,
Spain, France, Italia, Netherlands, Germany, UK,
Australia, USA, Singapore and Japan.
Employees 2022*
Male Female
# of total employees 262 67
# of full-time employees at end of year 260 64
# of part-time employees at end of year 2 3
# of temporary employees at end of year 0 0
# of involuntary part-time employees at
end of year
0 0
Gender distribution
at different job
levels/groups
Wage differences:
Females share of men’s
compensation in %
Female Male Total compensation
Total 20% 80% 82%
Senior
leadership team
29% 71% 57%
Employees in
leadership roles
21% 79% 87%
Other employees 20% 80% 80%
Employees 2021
Male Female
# of total employees 421 114
# of full-time employees at end of year 418 111
# of part-time employees at end of year 3 3
# of temporary employees at end of year 0 0
# of involuntary part-time employees at
end of year
0 0
* in non-terminated positions
At the end of 2022, the percentage of female
employees was 20.4%, compared to 21.3% at the
end of 2021. Pexip has a long-term ambition to
increase the share of women, aligned to the gender
balance in the industry as a whole. In Norway,
women working in the private sector represent
around 37%** of the workforce, but only around
29%*** of employees and 33% of leaders in IT
companies are women.
** Statistics Norway, Last updated 2019
*** KANTAR / ODA-Nettverk 2022
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Annual Report 2022Highlights About Pexip Corporate Governance Financials
There is a broad range of different roles and
responsibilities within the different categories,
which impacts the gender distribution and wage
differences, especially within the senior leadership
team. The senior leadership team comprises seven
employees, of which two are female. The Board
currently has seven members, of which three are
female.
In 2022, Pexip executed two rounds of downsizing
processes. The first process was initiated in May,
and the second in November. For Pexip and all of
Pexip’s employees, this has been a challenging
year, where the company has focused on staying
true to our values and in treating everyone with
respect and integrity. Equality and diversity
have been an important topic while conducting
these processes, and there have been a focus
on retaining the share of females through the
processes. It has been a top priority to provide a
fair process to all parties involved.
Going forward, the focus remains on diversity and
equality. Pexip’s goal is to be a diverse company,
offering equal opportunities, and a safe and risk-
free working environment for all employees. We
recognize there is still work to do, but Pexip is
committed to create more opportunities for a more
balanced representation and to dedicated DEI-
team work committed towards this. Pexip works
actively in each recruitment process to ensure to
create equal opportunities for all and to increase
female representation.
The work for equality is underpinned with several
policies. Pexip’s code of conduct includes the
company’s commitment to creating an equal
opportunity workplace, free from discrimination,
harassment, and victimization. Pexip’s human
capital policy outlines our principle of gender
pay equality, and our belief in equal pay for equal
work. Ensuring work-life balance is also strongly
embedded in Pexip’s culture, and meetings
and events shall be held virtually where this is
appropriate and possible.
During the year, we welcomed our new CEO, Trond
K. Johannessen. It was important for the board
to conduct the hiring process in a good manner,
give equal opportunities to all potential candidates
and the process included both female and male
candidates.
Parental leave 2022 Male Female
Employees entitled to parental leave 262 67
Employees that took parental leave of
more than one month
6 5
Weeks of maternity leave during the
year
83.8 124.6
Parental leave 2021 Male Female
Employees entitled to parental leave 421 114
Employees that took parental leave of
more than one month
3 2
Weeks of maternity leave during the
year
51.2 24.0
Sick leave 2022 Male Female
# of employees on sick leave during
the year
113 40
# of days of sick leave during the year 601 233
Sick leave 2021 Male Female
# of employees on sick leave during
the year
75 29
# of days of sick leave during the year 282 109
In the end of 2022, Pexip entered a collaboration
with Team Aker Dæhlie to support BEYOND. Team
Aker Dæhlie is the first professional athletic team
to include athletes from long-distance running, FIS/
allround, talents and para-crossing. The venture
is called BEYOND and is also about performing
beyond going fast on the cross-country track. Pexip
is proud to have joined this collaboration, and the
joint ambition and action for equality, equal pay and
equal opportunities.
Flexible working and healthy working
conditions
Pexip works to offer a safe and risk-free working
environment that promotes a healthy workplace
and facilitates work-life balance. The company
offers flexible working hours and flexible workplace
schemes to facilitate work-life balance and better
conditions for, for example, combining work and
parenting. In 2022, the average sick-leave was 0.8%
(2021: 0.3%). During the year, 6 male and 5 female
employees were on parental leave, where the male
employees took 84 weeks in total, while the female
employees took 125 weeks.
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Annual Report 2022Highlights About Pexip Corporate Governance Financials
Research and Development (R&D)
A core activity for Pexip is R&D related to distributed
software platforms for videoconferencing and
collaboration. During 2022 Pexip has delivered
several important innovations, as described
elsewhere in this report. The product development
strategy was assessed throughout the year. The
technology is developed with the aim of making
the company the industry leader within video
infrastructure and interoperability as well as secure
and customer communication solutions
for large international corporations and public
sector organizations. Of the total R&D in 2022,
Pexip capitalized NOK 41 million (NOK 48 million)
and the remaining cost has been classified as
operating expenses.
Risk and Risk Management
Risk management in Pexip is based on the principle
that risk evaluation is an integral part of all business
activities, and is a part of the annual strategy
review. Pexip has developed its approach to risk
assessment and risk mitigation within financial
reporting, and within information security, where
Pexip holds ISO 27001 and 27701 certifications as
an external recognition of its approach. Pexip’s key
commercial, technological, and operational risk
factors are summarized here.
Operational and Market activities
Pexip may be unable to retain or replace
its management and/or key IT, sales and
marketing professionals. Retaining Pexip’s
strong talent and leadership is vital due to their
extensive experience and skill sets within the
videoconferencing and collaboration industry,
which is required to support and develop Pexip’s
projects. It is also vital for Pexip’s operations to
retain or replace its IT professionals with expertise
within information security and privacy, as well
as certain IT professionals within R&D with skills
required to sustain and develop Pexip’s competitive
differentiation. There is shortage of, and intense
competition for, sales and marketing professionals
with ability and expertise to sell product and
services to large worldwide businesses and
organizations with lengthy procurement cycles and
severe evaluation and negotiation processes.
Pexip may not be able to respond to rapid
technological changes, extend its platform or
develop new services in a highly competitive
market. The communications and collaboration
technologies market is highly competitive and
characterized by rapid technological change and
frequent new product and service introductions.
Pexip’s future profitability depends heavily on
its ability to enhance and improve the platform,
introduce new features and products and
interoperate across an increasing range of devices,
operating systems and third-party applications.
There can be no assurance that any attempts on
enhancements to the platform or new product
experiences, features or capabilities will be
compelling to users or gain market acceptance in a
timely and cost-effective manner.
Pexip is exposed to risk related to high upfront
sales and marketing costs, lengthy sales cycles
and unexpected deployment challenges due to
its sales and marketing to large businesses and
organizations. As Pexip’s main focus is on large
enterprise customers, a large proportion of the sales
and marketing costs are related to such customers.
These customers and potential customers have
lengthy procurement cycles and severe evaluation
and negotiation processes due to their leverage,
size, organizational structure, and approval
requirements, and often demand additional features,
support services and pricing concessions or require
additional security management or control features.
Pexip spends substantial time, effort and funds on
sales and marketing efforts to potential customers
without any assurance that this will produce any
sales.
Pexip is exposed to risk related to cyber-threats.
As a technology group that delivers an end-
to-end videoconferencing platform and digital
infrastructure, Pexip and its customers are subject
to cyber-attacks from cybercriminals. Rapid
changes in attack vectors makes it difficult to stop
attacks and adapt to new threats and the increased
social hacking creates a cyber-threat risk for Pexip.
Pexip is exposed to risk relating to system
failures, defects, or errors. Certain applications
offered to customers are hosted on Pexip’s own
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Annual Report 2022Highlights About Pexip Corporate Governance Financials
servers, running in co-located data centers. Pexip
must maintain continuous data center operations
(including network, storage, and server operations)
to ensure adequate delivery of services. Pexip’s
data center operations may experience disruptions
or outages as a result of human error, equipment
error, cyberattacks, software failure or natural
disasters. Pexip’s platform and services are based
on inherently complex software technology, which
may have real or perceived defects, errors, failures,
vulnerabilities, or bugs in the platform and Pexip’s
products could result in negative publicity or
lead to data security, access, retention, or other
performance issues.
Operational Activities Risk Mitigation
To retain and attract talent, Pexip continuously
invests in strengthening the corporate culture, the
Pexip Way, as well as making sure Pexip is taking
advantage of all available talent through its diversity
initiatives. Pexip has developed a strong sales and
R&D capacity to stay ahead of competition. To
mitigate risks within cyber security and system
errors, Pexip invests in strengthening its system
architecture, as well as investing in competence
development and awareness training. Since the
founding of the company Pexip has invested in
automated software testing to ensure a robust,
enterprise-grade product offering.
Customer Relationships and Third Parties
Pexip depends highly on existing customers
renewing their subscriptions. Pexip’s offerings
are in a highly competitive communications
and collaboration market, with fluctuating user
satisfaction, demand for products and/or services,
financial position of customers and acceptance
and use of communications and collaboration
technologies in general. Pexip’s business operations
depend highly on renewed subscription by its
existing customer base.
Pexip is exposed to risk related to the
interoperability of Pexip’s platform across devices,
operating systems, and third-party applications.
Compared to its competitors’ solutions, Pexip’s
platform is accessible irrespective of technology
and device, and has integrations with traditional
video equipment, via browser, collaboration tools,
enterprise & internet streaming, and telephony.
Pexip is highly dependent on the accessibility of
its platform across these and other third-party
operating systems and applications that it does
not control. Third-party services and products are
constantly evolving, and Pexip may not be able to
modify its platform to assure compatibility with
that of other third parties following development
changes.
Customer Relationships and Third Parties
Risk Mitigation
Pexip invests substantial resources into R&D
to further develop its offering, and has also
invested in strengthening the Customer Success
methodology. In addition, Pexip has a dedicated
alliance team working with strategic partners to
build joint customer value and explore new areas of
cooperation with its alliance partners.
Laws Regulations and Compliance
Pexip is exposed to risk relating to data protection
and data privacy regulations, licenses, etc. Pexip
receives, stores and processes personal information
and other user data through its business and
operations in multiple jurisdictions. This makes
Pexip exposed to data protection and data privacy
laws and regulations it must comply with, which all
impose stringent data protection requirements and
provides possibly high penalties for non-compliance,
in particular relating to storing, sharing, using,
processing, disclosing and protecting personal
information and other user data on its platforms.
Pexip is subject to laws and regulations in several
jurisdictions, including governmental export and
import controls. Pexip’s platform and products
are subject to governmental export and import
controls that could impair Pexip’s ability to compete
in international and/or national markets due to
specific licensing requirements. Any change in
export or import laws and regulations could result
in decreased use of the Pexip platform or decreased
ability to export or sell subscriptions to the platform
to existing and/or potential customers with
international operations.
Pexip is exposed to risks of claims and legal
proceedings, including intellectual property
right disputes. Pexip may be party to various legal
proceedings that arise in the ordinary course of
Statement from the BoD
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Annual Report 2022Highlights About Pexip Corporate Governance Financials
its business, including intellectual property rights
disputes. The value of intellectual property rights
is of high importance for Pexip, as it operates in a
highly competitive commercial environment where
the strength of the intellectual property rights may
be an important feature that distinguishes Pexip
from its competitors. It is therefore important for
Pexip to ensure the value and commercial use of
its intellectual property rights. There can be no
assurance that third parties have not or may not
infringed intellectual property rights owned by
Pexip, who may have to challenge such parties’
rights to continue to use or sell certain products
and/or may seek damages from such parties.
Moreover, there can be no assurance that Pexip
may not infringe or be alleged to have infringed
intellectual property rights owned by third parties
who may challenge Pexip’s right to continue to use
or sell certain products and/or may seek damages
from Pexip. Any infringement or other intellectual
property claims made by or against Pexip could be
time-consuming, result in costly litigation, cause
product delays, divert its management from their
regular responsibilities or require Pexip to enter into
royalty or licensing agreements.
Laws Regulations and Compliance Risk
Mitigation
Pexip monitors the development of laws and
regulations in the markets it operates in, especially
within the data privacy area which has seen
significant development in recent years. Industry
standard insurance policies are also in place.
Financial and Market Risk
Pexip’s profitability, operating results and working
capital may fluctuate significantly. Operating in a
global, fast-changing market, Pexip’s profitability,
results of operations and working capital may
fluctuate significantly on a quarterly and annual
basis. In 2023 the company is targeting an EBITDA
of NOK 100-150 million. The subscription-based
revenues may also fluctuate significantly, both in
the short-term and long-term. Working capital
may also fluctuate significantly on a quarterly and
on an annual basis, which could have a material
adverse effect on Pexip’s business and financial
performance. This may be caused by factors beyond
Pexip’s control, such as variations in the timing of
orders and deliveries, new product introductions by
Pexip and its competitors, variations in spending
budgets of customers, shifts in market and industry
emphasis and end user demands, and general
economic conditions and economic conditions.
Pexip is exposed to foreign currency exchange
risk. Because a significant part of Pexip’s business
is conducted in currencies other than its functional
reporting currency (NOK, as defined below)
and Pexip has its majority of ARR in contracts
denominated in USD, Pexip will be exposed to
volatility associated with foreign currency exchange
rates. Exchange rate fluctuations may affect Pexip’s
financial results through translation of the profit
and loss accounts and balance sheets of foreign
subsidiaries into NOK. Currency risks may also arise
when Group companies enter into transactions
that are denominated in currencies other than their
functional currency. Pexip itself is also invoiced
in other currencies than its functional currency,
thus resulting in currency exposure from both a
customer and supplier position. Currency exposure
is the result of purchases of goods and services in
other currencies than Pexip’s functional currency
(transaction exposure) and of the conversion of
the balance sheets and income statements in
foreign currencies into NOK (translation exposure).
Such translation exposure does not give rise to an
immediate cash effect. Pexip does not use financial
instruments to hedge its exposure to foreign
exchange rate risks, and there is no guarantee
that Pexip’s financial results will not be adversely
affected by currency exchange rate fluctuations
or that any efforts by Pexip to engage in currency
hedging activities will be effective.
Pexip is exposed to risk relating to impairment
of intangible assets, including goodwill. The
company’s audited consolidated financial statement
for the year ended 31 December 2022 was prepared
in accordance with the International Financial
Reporting Standards (IFRS), as adopted by the
European Union. As of 31 December 2022, Pexip’s
non-current assets amounted to approximately
NOK 1,408 million which constituted 67% of Pexip’s
total assets, most of which are intangible assets
including NOK 663 million in goodwill. Goodwill
acquired in a business combination is not amortized
pursuant to IFRS, but is tested for impairment
annually, or more often, if an event or circumstance
indicates that an impairment loss may have been
incurred. The key assumption affecting the present
Statement from the BoD
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Annual Report 2022Highlights About Pexip Corporate Governance Financials
value of cash flows are the development of the
net sales (expected growth rate), profitability, the
discount rate and the growth rate. Changes in the
development of the key assumptions could lead
to impairment losses on goodwill, which could
weaken Pexip’s financial conditions, results of
operations, equity and/or its ability to pay dividends
or distributions. At the end of 2022 there is limited
headroom giving a risk of impairment in the case
of an adverse development in the key assumptions.
This is further described in the notes to the Annual
Accounts for 2022.
Financial and Market Risk mitigation
Pexip maintains a robust balance sheet with a
significant cash position in order to fund its growth
investments and working capital needs. In addition,
the company has very limited interest-bearing debt.
Pexip does not use hedging instruments, but holds
its cash holdings in a range of currencies according
to its main cash outflows. Pexip currently has
positive headroom in its impairment tests, but this
is sensitive to both changes in cost of capital as well
as future cash flow estimates.
Impact of Russia’s Invasion of Ukraine
The development in Ukraine, and the impact on
business in the region is still ongoing. The war in
Ukraine has impacted Pexip in several ways. Pexip
has two remote employees based in the conflict
area and several employees from the involved
countries in other offices. Pexip’s main concern has
been to ensure their safety and offer support to
them in the best way. The financial effect from this
is limited until this date due to a modest market
presence in the region, with the main impact being
in accounts receivables with customers in Russia
now under sanction as well as a negative impact
on future revenues in the region. In response to the
attack on Ukraine, several extensive packages of
sanctions towards Russia have been launched. The
imposed sanctions are far-reaching. Norway has
adhered to all EU sanctions and has transposition
sanctions into Norwegian law. To ensure
compliance with the abovementioned measures,
Pexip continuously maps our exposures to Russia,
Donetsk and Luhansk and Belarus. This includes, for
example, systematic identification and assessment
of current relationships with banks, Resellers and
Customers based in Russia or wholly or partly
owned by Russian interest. All such relations are
thoroughly considered to ensure compliance with
sanctions.
Impact from the market situation
The global economic situation has faced increasing
challenges during 2022, with slowing growth and
higher inflation in Pexip’s key markets. This impacts
Pexip’s customers, as several large enterprise
companies have announced cost reduction
programs. This has also had a negative impact on
the financial markets with an increasing cost of
capital. Pexip has taken action through its cost
reduction program to reduce its cost base, which
has contributed to mitigate cost increases on key
cost categories such as employee benefit expenses
and cost of cloud computing. Pexip targets a
positive free cash flow in 2023 and has very limited
interest-bearing debt and a strong balance sheet. As
such, the company is less exposed to the increasing
cost of capital.
Corporate Governance
Good corporate governance provides the foundation
for long-term value creation, to the benefit of
shareholders, employees and other stakeholders.
The Board has established a set of governance
principles to ensure a clear division of roles
between the Board, the executive management
and the shareholders. The principles are based
on the Norwegian Code of Practice for Corporate
Governance. Pexip is subject to annual corporate
governance reporting requirements under section
3-3b of the Norwegian Accounting Act and
the Norwegian Code of Practice for Corporate
Governance, cf. section 7 on the continuing
obligations of stock exchange listed companies.
The Accounting Act may be found (in Norwegian) at
www.lovdata.no. The Norwegian Code of Practice
for Corporate Governance, which was last revised
on October 14, 2021, may be found at www.nues.
no. Pexip is subject to the Norwegian Transparency
Act, and the assessment can be found in the
sustainability report. The annual statement on
corporate governance for 2022 has been approved
by the Board and can be found on page 32 in this
annual report.
A Directors and Officers Liability Insurance is in
place for members of the Board of Directors and
Statement from the BoD
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Annual Report 2022Highlights About Pexip Corporate Governance Financials
the CEO for their potential liability towards the
Company and third parties. The insurance covers
the Board’s and the CEO’s legal personal liability
for financial damage caused by the performance
of their duties. The insurance additionally covers
any employee acting in a managerial capacity and
includes subsidiaries owned with more than 50%.
The insurance policy is issued by a reputable,
specialized insurer with appropriate rating.
Share and Shareholder Matters
The Pexip share is listed on Oslo Børs under the
ticker PEXIP. The company was listed on Oslo Børs
on May 14, 2020 with a subscription price of NOK
63.00 per share.
Pexip has only one share class, and all shares have
equal rights in the company.
On December 31, 2022, the share capital of Pexip
Holding ASA was NOK 1,566,445 divided into
104,429,671 ordinary shares with a par value of NOK
0.015. The share had a closing price on December
30, (last day the share was traded in 2022) of NOK
12.80 per share.
The turnover of shares is a measure of traded
volumes. On average, 662,407 Pexip shares were
traded on Oslo Børs every day in 2022.
As of December 31, 2022, Pexip had 6,664
shareholders registered in the VPS. The
shareholders were from 29 different countries
across the world, with 23.7% of holdings were
held by shareholders outside Norway. The top 20
shareholders held 44.4% of the registered shares.
The shares are registered in the Norwegian Central
Securities Depository (VPS). The company’s
registrar is DNB Markets. The shares carry the
securities number ISIN NO 0010840507.
Pexip aims to have an open and transparent dialog
with shareholders and investors. Pexip has a set
of guidelines for investor relations. The purpose of
the investor relations guidelines is to ensure that
relevant, accurate and timely information is made
available to the market as a basis for fair pricing
and regular trading of the company’s shares, and
the company is perceived as a visible, accessible,
reliable and professional company by the capital
market, while at the same time always observing the
rules and legislation for listed companies on Oslo
Børs.
Pexip ensured that all relevant information
required for external evaluation of the company
was published in accordance with applicable rules
and guidelines set by Oslo Børs. The company also
conducted investor roadshows with investors across
the globe in connection with the interim results and
participated on a number of industry and investment
seminars during the year.
Going Concern
The Board confirms that Pexip qualifies as a going
concern and the financial statements have been
prepared on this basis. The Board has confirmed
that this assumption can be made on the basis of
the group’s strategy, outlook and budgets.
Statement from the BoD
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Annual Report 2022Highlights About Pexip Corporate Governance Financials
Board of Directors
SIGNATURE PAGE
Oslo, March 28, 2023
Board of Directors and CEO of Pexip Holding ASA
Statement from the BoD
Michel Sagen
Chair of the Board
Trond K. Johannessen
CEO
Per Haug Kogstad
Board Member
Irene Kristiansen
Board Member
Phillip Austern
Board Member
Kjell Skappel
Vice-Chair of the Board
Asta Ellingsen Stenhagen
Board Member
Marianne Wergeland Jenssen
Board Member
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Annual Report 2022Highlights About Pexip Statement from the BoD FinancialsCorporate Governance
Corporate governance
Good corporate governance provides the basis for long-term value creation, to the
benefit of shareholders, employees and other stakeholders. The Board of Pexip has
established a set of governance principles in order to ensure a clear division of roles
between the Board, the executive management and the shareholders. The principles are
based on the Norwegian Code of Practice for Corporate Governance.
Pexip is subject to annual corporate governance
reporting requirements under section 3-3b of the
Norwegian Accounting Act and the Norwegian Code
of Practice for Corporate Governance, cf. section
7 on the continuing obligations of stock exchange
listed companies. The Accounting Act may be found
(in Norwegian) at www.lovdata.no. The Norwegian
Code of Practice for Corporate Governance, which
was last revised on October 14, 2021, may be found
at www.nues.no.
The annual statement on corporate governance for
2022 follows below. The statement was approved by
the Board on March 28, 2023.
1. Implementation and Reporting
on Corporate Governance
The Board is committed to building a sound and
trust-based relationship between Pexip and
the company’s shareholders, the capital market
participants, and other stakeholders.
Pexip’s overall principles for corporate governance
are approved by the Board and can be found at
https://investor.pexip.com/corporate-governance.
Pexip complies with the Norwegian Code of
Practice for Corporate Governance (the code) issued
by the Norwegian Corporate Governance Board,
latest edition of October 14, 2021.
The Board’s annual statement on how Pexip
has implemented the code is set out below. The
statement covers each section of the code, and
deviations from the code, if any, are specified under
the relevant section.
2. Business
Pexip’s articles of association are available on
Pexip’s website.
Article 3 of these articles, Pexip’s business
objectives states: “The company’s objective is
to operate, own and/or invest in businesses or
development related to telecommunication services
and telecommunication solutions, investment
in other companies or development of other
businesses, and anything related to the foregoing.
Within the framework of its articles of association,
Pexip has established goals and strategies for its
business.
Pexip’s objectives and strategies are presented
in the annual report in section “About Pexip”. The
evaluation of Pexip’s objectives and strategies as
well as risk and risk management are described in
the Board’s report. The “Environmental, Social and
Governance” section in the Board’s report covers
considerations on sustainable value creation.
When carrying out its work on defining objectives,
strategies, and risk profiles to create value
for shareholders in a sustainable manner, the
Board takes into account financial, social and
environmental considerations. The Board has
guidelines for how it integrates considerations
related to its stakeholders into its value creation.
The Board evaluates these objectives, strategies
and risk profiles at least yearly.
3. Equity and Dividends
Equity
As of December 31, 2022, Pexip had a consolidated
equity of NOK 1,597 million, corresponding to an
equity ratio of 76.5%.
The Board considers that Pexip has a capital
structure that is appropriate for its objectives,
strategy and risk profile.
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Annual Report 2022Highlights About Pexip Statement from the BoD FinancialsCorporate Governance
Dividends
In deciding whether to propose a dividend and in
determining the dividend amount, the Board will
comply with the legal restrictions set out in the
Norwegian Public Limited Liabilities Companies
Act and take into account the company’s capital
requirements, including capital expenditure
requirements, the company’s financial condition,
general business conditions and any restrictions
that its contractual arrangements in place at the
time of the dividend may place on its ability to pay
dividends and the maintenance of appropriate
financial flexibility.
The proposal to pay a dividend in any year is, in
addition to any legal restrictions further subject
to any restrictions in the company’s borrowing
arrangements or other contractual arrangements in
place at the time.
The company is operating in both mature markets
and in markets with strong growth opportunities.
Through 2022 Pexip has improved its profitability,
however, did not make a profit for 2022, hence
will not pay a dividend for 2022. Future dividend
decisions will be based on the operating cashflow
development as well as the available investment
opportunities available to the company. The
company has not paid any dividends on its Shares
during the financial years ended December 31, 2022,
2021, 2020, 2019, 2018 and 2017.
Board Mandates to Increase the Share
Capital
At the Annual General Meeting of the company on
April 21, 2022 the Board was authorized to increase
the share capital of Pexip for general purposes by
up to NOK 310,000 in one or more share capital
increases through issuance of new shares. The
authorization was only to be used in connection with
(i) capital raisings for the financing of the company’s
business; and (ii) in connection with acquisitions
and mergers. The authorization can be used in
situations described in the Norwegian Securities
Trading Act section 6-17. The authorization is valid
until the annual general meeting in 2023, however
no longer than until June 30, 2023. The Board did
not issue any shares in relation to this authorization
since the Annual General Meeting on April 21, 2022
and up to the date of this report.
At the Annual General Meeting of the company
on April 21, 2022 the Board was authorized to
increase the share capital of Pexip by up to NOK
156,000 in one or more share capital increases
through issuance of new shares. The authorization
was only be used in connection with issuance of
shares to the group’s employees or board members
in relation with option and incentive programs,
both individual and general. The authorization
can be used in situations as described in the
Norwegian Securities Trading Act section 6-17.
The authorization is valid until the annual general
meeting in 2023, however no longer than until
June 30, 2023. No new shares have been issued
by the Board since the Annual General Meeting on
April 21, 2022 and up to the date of this report.
4. Equal Treatment of
Shareholders
The company’s share capital is NOK 1,566,445
divided into 104,429,671 shares, each with a
nominal value of NOK 0.015.
The company holds 3,048,038 own shares at the
end of 2022 and on date of this report.
The Board and the executive management are
committed to ensure equal treatment of all the
company’s shareholders and that transactions
with related parties take place on an arm’s length
basis. Note 27 to the consolidated financial
statements provides details about transactions
with related parties. Financial relationships related
to the directors and executive personnel are
described in note 4.
5. Shares and Negotiability
The company’s shares are freely negotiable.
The articles of association do not impose any
restriction on the negotiability of the shares.
There are no general restrictions on the purchase
or sale of shares by members of the company’s
management as long as they comply with the
regulations on insider trading and in the Market
Abuse Regulation. Each share carries one vote.
6. General Meetings
All shareholders have the right to participate
in the general meetings of the company, which
exercise the highest authority of the company. The
Board ensures that its shareholders can attend
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Annual Report 2022Highlights About Pexip Statement from the BoD FinancialsCorporate Governance
and participate in the general meeting. The annual
general meeting will take place on April 20, 2023.
The Group’s financial calendar is published via Oslo
Børs and in the investor relations section of Pexip’s
website.
Notice, Registration and
Participation
The full notice for general meetings shall be
sent to shareholders no later than 21 calendar
days prior to the meeting. The notices for such
meetings shall include documents providing the
shareholders with sufficient detail in order for
the shareholders to make an assessment of all
the cases to be considered as well as all relevant
information regarding procedures of attendance
and voting. The notice and the documents may
be sent to or made available for the shareholders
by electronic communication, to the extent
allowed in the company’s articles of association.
The members of the Board and the Chair of the
nomination committee are present at the general
meeting. The company’s auditor shall normally
be present at general meetings. The deadline
for registering attendance is set as close to the
meeting as possible, and, pursuant to the articles
of association; no sooner than five days in advance
of the general meeting. Shareholders who intend
to attend a general meeting of the company shall
give the company written notice of their intention
within a time limit given in the notice of the general
meeting, which cannot expire earlier than five days
before the general meeting. Shareholders, who have
failed to give such notice within the time limit, can
be denied admission.
Proxy Form, Advance Voting and Voting
Restrictions
Notices with documentation are made available
on Pexip’s website immediately after the
documentation has been issued as a stock exchange
announcement.
General-meeting notices provide information on the
procedures for attendance and voting, including the
use of proxies. Shareholders who cannot attend in
person are encouraged to appoint a proxy.
A proxy form, where a proxy has been named, is
framed in such a way that the shareholder can
specify how the proxy should vote on each issue
to be considered. The notices include information
on the right to raise issues for consideration at the
general meeting, including the relevant deadlines.
Shareholders may cast a written vote in advance in
matters to be discussed at the general meetings of
the company. Such votes may also be cast through
electronic communication.
The access to cast votes in advance is subject to
the presence of a safe method of authenticating the
sender. The Board decides whether such a method
exists before each individual general meeting.
The notice of the general meeting states whether
votes in advance are permitted and which
guidelines, if any, that have been issued for such
voting.
Chairing Meetings, Elections, etc.
General Meetings will normally be chaired by the
General Counsel. The Board will evaluate prior to
each General Meeting whether it is appropriate to
engage an external Chair to chair the meeting.
The Group’s members of the Board and Chief
Executive Officer (CEO) are required to attend, in
accordance with the instructions for the Board.
The nomination committee is encouraged to
attend those meetings where the election and
remuneration of directors and members of the
nomination committee are to be considered. The
Board requires that the Chair of the nomination
committee is present. The Group’s auditor is
normally present at the Annual General Meeting.
The general meeting is normally invited to vote for a
complete shareholder-elected Board. Shareholders
will be able to vote on each individual candidate
nominated for election.
Minutes from general meetings are published
as soon as practicable via the stock exchange’s
reporting system (www.newsweb.no, ticker code:
PEXIP) and in the investor relations section of
Pexip’s website.
7. Nomination Committee
The nomination committee is laid down in article
8 of the company’s articles of association. The
company shall have a nomination committee,
elected by the general meeting. The members of
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Annual Report 2022Highlights About Pexip Statement from the BoD FinancialsCorporate Governance
the nomination committee should be selected to
take into account the interests of shareholders
in general, and the majority of the nomination
committee should be independent of the Board
and the executive management team. No board
member or member of the executive management
team should serve on the nomination committee.
Members of the executive management team
should not be members of the nomination
committee.
The nomination committee shall present
proposals to the general meeting regarding (i)
election of the Chair of the Board, board members
and any deputy members, and (ii) election of
members of the nomination committee. The
nomination committee shall also present proposals
to the general meeting for remuneration of the
Board and the nomination committee, which is to
be determined by the general meeting.
In its work, the nomination committee may
contact shareholders, members of the Board, the
management and external advisers. Shareholders
should be given the opportunity to propose board
member candidates to the Nomination Committee.
The nomination committee shall give considerable
weight to the wishes of the shareholders when
making its recommendations.
Members of the nomination committee are elected
for a term of one year but may be re-elected. The
members may be removed or replaced at any time
by a resolution of the general meeting. In order to
ensure continuity, a maximum of two members
should be up for election at any time.
The annual general meeting stipulates the
remuneration to be paid to the nomination
committee. The nomination committee’s expenses
shall be covered by the company.
The general meeting shall adopt instructions for
the nomination committee.
The Annual General Meeting on May 21, 2021
re-elected Dag S. Kaada (Chair), Oddvar Fosse
and Arild Resen as members of the nomination
committee for a period up to the annual general
meeting in 2022. The annual general meeting
on April 21, 2022 made no changes to the
composition of the committee. No directors
or members of executive management are
represented in the nomination committee.
8. Board of Directors:
Composition and Independence
Pursuant to the articles of association, the Board
shall consist of between 3 and 7 board members,
as decided by the general meeting. The Board
currently has seven shareholder-elected directors.
Directors and the Chair of the Board are currently
elected by the general meeting for a one-year
term.
The composition of the Board is intended to secure
the interests of the shareholders in general, while
the directors also collectively possess a broad
business and management background as well
as in-depth sector understanding and expertise
in investment, financing and capital markets.
Weight is also given to the Board’s ability to
make independent judgements of the business in
general and of the individual matters presented
by the executive management. Consideration
has also been given to gender representation and
independence of directors from the company and
its management.
The Board does not include executive personnel.
All shareholder elected directors are independent
of Pexip’s executive management and commercial
partners. The Chair of the Board has during 2022
worked as support to executive management in
the initial phase as a listed company. He was doing
this at a 60% engagement until 1 June 2022, at
which the engagement was reduced to 20%, and
on 30 September 2022 this engagement ended.
Details on background, experience and
independence of directors are presented on Pexip’s
website.
15 board meetings were held in 2022, in addition
to several Board workshops and committee
meetings. Each board member’s attendance at
Board meetings is recorded by the company.
Members of the Board are encouraged to own
shares. The shareholding of each board member
can be found in note 16 to the consolidated
financial statements and in the biography of each
board member on https://investor.pexip.com/
corporate-governance-Board.
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Annual Report 2022Highlights About Pexip Statement from the BoD FinancialsCorporate Governance
9. The Work of the Board
The Board shall prepare an annual plan for its
work with special emphasis on goals, strategy and
implementation. The Board’s primary responsibility
shall be (i) participating in the development and
approval of the company’s strategy, (ii) performing
necessary monitoring functions and (iii) acting as
an advisory body for the executive management
team. Its duties are not static, and the focus will
depend on the company’s ongoing needs. The Board
is also responsible for ensuring that the operation
of the company is compliant with the company’s
values and ethical guidelines. The Chair of the Board
is responsible for ensuring that the Board’s work
is performed in an effective and correct manner.
The Board shall ensure that the company has
proper management with clear internal distribution
of responsibilities and duties. A clear division of
work has been established between the Board
and the executive management team. The CEO is
responsible for the executive management of the
company. All members of the Board shall regularly
receive information about the company’s operational
and financial development. The company’s
strategies shall regularly be subject to review and
evaluation by the Board. The Board shall prepare an
annual evaluation of its work.
The Role of the Board
The Board shall contribute with expertise and
experience to management. It shall set the vision,
values and long-term objectives of the company.
The Duties of the Board
The duties of the Board are subject to the existing
laws, the company’s articles of association, powers
and instructions given by the general meeting,
these instructions and the company’s Corporate
Governance Policy. The main duties of the Board
may be divided in:
• The Board’s administration of the company,
cf. the Norwegian Public Limited Liability
Companies Act (the Companies Act) Section
6-12
• The Board’s supervisory responsibility, cf. the
Companies Act Section 6-13
The Board shall in general get involved and consider
all matters that are significant to the company’s
financing, operational performance and long-term
development.
The Board’s Administration of the Company
The Board shall ensure an adequate organization of
the business, including appointment and discharge
of the CEO and issuing of instructions to him
(the Companies Act Section 6-2) The Board is
responsible for issuing any incentive programs for
the management of the company.
The Board shall approve the overall strategy,
business plans and budgets for the company.
The strategy discussions shall be finalized well in
time before the yearly budget process is started.
The Board shall, when necessary, timely initiate
discussions on strategic areas, especially within
re-structuring and/or change of the administration
and/or the management.
Through an adequate monthly reporting system,
the Board members shall keep themselves fully
updated on the company’s operational and financial
development. The information shall be given in a
meeting and/or in writing.
The annual report and the annual accounts shall be
submitted to the Board for approval within relevant
legal time frames. The Board shall submit its annual
report, which shall include information about net
profit or loss and prospects for the future (cf. the
Accounting Act Section 3-3, cf. Section 3-8).
The Board shall, in cooperation with the executive
management team, issue the company’s dividend
policy and is responsible for submitting proposals
(if any) for distribution of dividend to the general
meeting.
The Board’s Supervisory Responsibility
The Board shall supervise the management of the
company’s business in general. The Board may issue
instructions for the CEO.
Adequate Equity
The Board shall see to that the company is at all
times funded and financed adequately in terms of
the risk and scope of the company’s business.
The Board’s Duties in Relation to the
General Meeting
The general meetings are convened by the Board
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Annual Report 2022Highlights About Pexip Statement from the BoD FinancialsCorporate Governance
(the Companies Act Section 5-8). The Board shall
prepare all matters which shall be considered by the
general meeting.
Directors of the Board and the CEO have the right
to attend and speak at general meetings. The Chair
of the Board and the CEO shall, save in case of
legal absence, attend general meetings unless the
general meeting in each case decides otherwise (the
Companies Act Section 5-5).
The Board shall submit its proposal to profit and
loss account and balance sheet, and its proposal
to application of profit or coverage of loss to each
shareholder (the Companies Act Section 5-6 third
paragraph) preferably together with the notice to
the general meetings, but not later than one week
before the matter shall be considered by the general
meeting.
Related Parties
Any transactions, agreements or arrangements
between the Group and the Company’s
shareholders, members of the Board, members of
the executive management team or close associates
of any such parties may only be entered into as part
of the ordinary course of business and on arm’s
length market terms. All such transactions shall
where relevant comply with the procedures set out
in the Norwegian Public Limited Liability Companies
Act. The Board will arrange for a valuation to be
obtained from an independent third party unless the
transaction, agreement or arrangement in question
is considered to be immaterial. The Company’s
financial statements shall provide further
information about transactions with related parties
in accordance with applicable accounting principles.
Board members shall immediately notify the Board
and members of the executive management team
shall immediately notify the CEO (who where
relevant will notify the Board) if they have any
material direct or indirect interest in any transaction
entered into by the Group.
Other Responsibilities
The Board shall be responsible for all other duties
which are attributed to the Board pursuant to laws
or the articles of association, and the Board shall
keep itself informed about or resolve matters which
in the opinion of the administration or the Chair of
the Board is natural or required.
10. Risk Management and
Internal Control
As set out in the corporate governance guidelines
of Pexip Holding ASA, the company’s Board shall
ensure that the company has sound internal
control and systems for risk management that are
appropriate in relation to the extent and nature
of the company’s activities. This document sets
out the routines for such internal control and risk
management.
Objective of the risk management and
internal control
The objective for the company’s risk management
and internal control is to manage, rather than
eliminate, exposure to risks related to the successful
conduct of the company’s business and to support
the quality of its financial reporting. Effective risk
management and good internal control contribute to
securing shareholders’ investment in the company
and the company’s assets.
The Board’s Responsibility for Risk
Management and Internal Control
The Board shall ensure that the company’s internal
control comprises guidelines, processes, duties,
conduct and other matters that:
• facilitate targeted and effective operational
arrangements for the company and also make it
possible to manage commercial risk, operational
risk, the risk of breaching applicable legislation
and regulations as well as all other forms of
risk that may be material for achieving the
company’s commercial objectives
• contribute to ensuring the quality of internal
and external reporting
• contribute to ensuring that the company
operates in accordance with the relevant
legislation and regulations as well as with its
internal guidelines for its activities, including
the company’s ethical guidelines and corporate
values
The Board shall form its own opinion on the
company’s internal controls, based on the
information presented to the Board. Reporting
by executive management to the Board shall
be prepared in a format which gives a balanced
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Annual Report 2022Highlights About Pexip Statement from the BoD FinancialsCorporate Governance
presentation of all risks of material significance, and
of how the internal control system handles these
risks.
Internal Control and Risk
Management System
The Board shall develop and assess the need
for internal control systems which address the
organization and execution of the company’s
financial reporting. These systems shall be
continuously developed in light of the company’s
growth and situation.
The Board shall also focus on the need for
developing ethical guidelines ensuring that
employees can safely communicate to the Board
matters related to illegal or unethical conduct by the
company. The Board shall ensure that the company
has the necessary routines and hired personnel to
ensure that any outsourced functions are handled in
a satisfactory manner.
Pexip’s primary internal control routines related
to financial reporting are as follows: The Finance
department prepares a monthly financial report
which also contains the most important operational
KPIs and qualitative developments, comparing the
results to previous period and to budget. This report
is reviewed by the CEO, the management team and
the Board. The Board Audit Committee reviews
each quarterly financial statement with a particular
focus on risk elements, such as special transactions
and estimates, and the Board reviews and approves
quarterly and annual reports.
Each year, the external auditor performs tests of the
company’s internal control routines and presents
the findings to the Board. On this basis, the Board
reviews management’s plan for further development
of the company’s internal control system.
Annual Review by the Board
The Board shall carry out an annual review of the
company’s most important areas of exposure to risk
and of the company’s internal control systems. The
Board’s review shall cover all matters included in
reports to the Board during the course of the year,
together with any additional information that may
be necessary to ensure that the Board has taken
into account all matters related to the company’s
internal control.
When conducting their review, the Board shall pay
attention to:
• changes relative to previous years’ reports in
respect of the nature and extent of material
risks and the company’s ability to cope with
changes in its business and external changes
• the extent and quality of management’s routine
monitoring of risks and the internal control
system and, where relevant, the work of the
internal audit function
• the extent and frequency of management’s
reporting to the Board on the results of such
monitoring, and whether this reporting makes
it possible for the Board to carry out an overall
evaluation of the internal control situation in the
company and how risks are being managed
• instances of material shortcomings or
weaknesses in internal control that come
to light during the course of the year which
have had, could have had or may have had a
significant effect on the company’s financial
results or financial standing
• to which extent the company’s external
reporting process functions
The Board shall provide an account in the annual
report of the main features of the company’s
internal control and risk management systems as
they relate to the company’s financial reporting.
11. Remuneration of the Board of
Directors
The general meeting determines the Board’s
remuneration annually, normally in advance, on the
basis of recommendations from the nomination
committee. Remuneration of Board members
shall be reasonable and based on the Board’s
responsibilities, work, time invested and the
complexity of the enterprise. The Board shall be
informed if individual Board members perform tasks
for the company other than exercising their role
as Board members. Work in sub-committees may
be compensated in addition to the remuneration
received for Board membership. This is further
described in the Pexip’s Remuneration Guidelines
and Remuneration report for 2022.
With the exception of the Chair of the Board,
none of the directors have undertaken any special
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Annual Report 2022Highlights About Pexip Statement from the BoD FinancialsCorporate Governance
assignments for Pexip other than their work on the
Board and Board committees. Directors are unable
to accept such assignments without approval from
the Board in each case.
12. Salary and Other
Remuneration of Executive
Personnel
The Board has a remuneration committee. The
main responsibilities of the committee are to
evaluate and propose the remuneration guidelines
and issue an annual report on the compensation
of the executive management team, which shall
be included in the company’s annual accounts
pursuant to applicable rules and regulations,
including accounting standards, promulgated from
time to time. This is further described in Pexip’s
Remuneration Guidelines and Remuneration
report for 2022.
Changes to the Executive Management
and the Board
The annual general meeting on April 21, 2022 re-
elected the following Board, in accordance with
the Board’s proposal:
i. Michel Sagen, chair
ii. Kjell Skappel, vice-chair
iii. Per Haug Kogstad, member
iv. Irene Kristiansen, member
v. Marianne Wergeland Jenssen, member
vi. Phillip Austern (new)
vii. Asta Ellingsen Stenhagen (new).
Michel Sagen, Per Haug Kogstad and Irene
Kristiansen are elected for a term of one year. Kjell
Skappel, Marianne Wergeland Jenssen, Phillip
Austern and Asta Ellingsen Stenhagen are elected
for a term of two years. No new deputy members
were elected.
On July 1, 2022, Ian Mortimer became a part of the
management team as the SVP Technology, and on
December 1, 2022, assumed the position of Chief
Technology Officer. The role was previously held
by Nico Cormier, who left Pexip on September
30, 2022. On November 7, 2022, Helge Hansen
assumed the role of SVP Strategy as part of the
management team.
13. Information and
Communications
The Board has established guidelines for investor
communication. Pexip’s communication with
the capital markets is based on the principles of
transparency, full disclosure and equality. These
guidelines are published on investor.pexip.com.
The CEO, CFO and Director of Investor Relations
are responsible for the main dialogue with the
investor community, hereunder the company’s
shareholders.
Pexip follows the Norwegian corporate governance
code. This includes the code’s policy and principles
for publication of relevant information. Therefore,
information shall at all times be available on
Pexip’s investor website (investor.pexip.com).
English will be the primary language used
for investor communication. Stock exchange
notices and other formal communications will
be published in English. Information to the stock
market is published in the form of annual and
interim reports, press releases, stock exchange
announcements and investor presentations. All
information considered relevant and significant for
valuing the company’s shares will be distributed
and published in English via Oslo Børs disclosure
system, www.newsweb.no, and via Pexip’s investor
website (investor.pexip.com) simultaneously.
Pexip holds public presentations in connection
with the announcement of quarterly and annual
financial results as well as strategic updates. The
presentations are available as live presentations
via the internet. Presentation material is made
available via Oslo Børs’ news site www.newsweb.
no and investor.pexip.com.
Pexip gives weight to maintaining an open and
ongoing dialogue with the investor community,
hereunder frequent meetings with investors, fund
managers, analysts and journalists. The company
is also present at relevant investor conferences
and seminars. Presentations held at such events
are made public via investor.pexip.com.
The guidelines for investor communication state
that in the last three weeks prior to distribution
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Annual Report 2022Highlights About Pexip Statement from the BoD FinancialsCorporate Governance
and publication of company results, no meetings
with shareholders, investors or analyst are to be
held. Pexip also has the right to put into effect Silent
Periods in connection with other corporate events.
In Silent Periods, no comments will be given to other
stakeholders, such as the press, on Pexip’s results
and future development.
Reporting of financial and other information shall
be timely and accurate. The main purpose of this
information presents a complete picture of Pexip’s
financial results and position as well as articulating
Pexip’s long-term goals and potential, including its
strategy, value drivers and important risk factors.
The Group publishes a financial calendar every year
with an overview of the dates of important events,
including the general meeting, publication of interim
reports and open presentations. This calendar is
made available as a stock exchange announcement
and on Pexip’s website as soon as it has been
approved by the Board.
14. Takeovers
The Board has established guiding principles for
responding to possible takeover bids.
In a take-over process, should it occur, the Board
and the executive management team each have
an individual responsibility to ensure that the
company’s shareholders are treated equally and
that there are no unnecessary interruptions to the
company’s business activities. The Board has a
particular responsibility in ensuring, to the extent
possible, that the shareholders have sufficient
information and time to assess the offer.
In the event of a take-over process, the Board shall
ensure that:
• the Board will not seek to hinder or obstruct
any takeover bid for the company’s operations
or shares unless there are particular reasons for
doing so;
• the Board will not undertake any actions
intended to give shareholders or others an
unreasonable advantage at the expense of other
shareholders or the Company;
• the Board will not institute measures with the
intention of protecting the personal interests of
its members at the expense of the interests of
the shareholders; and
• the Board shall be aware of the particular duty it
has for ensuring that the values and interests of
the shareholders are protected.
In the event of a take-over bid, the Board will, in
addition to complying with relevant legislation
and regulations, seek to comply with the
recommendations in the Norwegian Code of
Practice for Corporate Governance unless there are
particular reasons not to. This includes obtaining a
valuation from an independent expert. On this basis,
the Board will seek make a recommendation as to
whether or not the shareholders should accept the
bid.
15. Auditor
The external auditor, Deloitte, annually presents
its overall plan for the audit of Pexip for the audit
committee’s consideration.
The external auditor’s involvement with the Board
during 2022 related to the following:
• Presented the main features of the audit work.
• Attended all audit committee meetings
approving the financial statements, reviewing
possible significant changes in accounting
principles, assessing significant accounting
estimates, and considering all possible
disagreements between the external auditor
and executive management.
• Reviewed Pexip’s internal control procedures
and systems, including the identification of
weaknesses and proposals for improvements.
• Held a meeting with the Board without the
presence of the executive management.
• Confirmed its independence and provided an
overview of non-audit services provided to
Pexip.
• During 2022, the external auditor attended 6
meetings with the audit committee in addition
to one meeting with the Board.
Pursuant to the code, the Board has established
guidelines for Pexip’s management use of the
external auditor for non-audit services.
The Board reports annually to the annual general
meeting on the external auditor’s total fees, split
between audit and non-audit services. The annual
general meeting approves the auditor’s fees for the
holding company.
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Highlights About Pexip Statement from the BoD Corporate Governance Financials Annual Report 2022Corporate Governance
Board of Directors
SIGNATURE PAGE
Oslo, March 28, 2023
Board of Directors and CEO of Pexip Holding ASA
Michel Sagen
Chair of the Board
Trond K. Johannessen
CEO
Per Haug Kogstad
Board Member
Irene Kristiansen
Board Member
Phillip Austern
Board Member
Kjell Skappel
Vice-Chair of the Board
Asta Ellingsen Stenhagen
Board Member
Marianne Wergeland Jenssen
Board Member
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Highlights About Pexip Statement from the BoD Financials Annual Report 2022Corporate Governance
Executive Management
Øystein Hem
Chief Financial Officer
Patricia Auseth
Chief Marketing Officer
Trond K. Johannessen
Chief Executive Officer
Ingrid Woodhouse
Chief People Officer
Helge Hoff Hansen
SVP Strategy
Åsmund O. Fodstad
Chief Revenue Officer
Ian Mortimer
Chief Technology Officer
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Highlights About Pexip Statement from the BoD Financials Annual Report 2022Corporate Governance
Board of Directors
Marianne Wergeland Jenssen
Board Member
Kjell Skappel
Vice-Chair of the Board
Michel Sagen
Chair of the Board
Per Haug Kogstad
Board Member
Asta Ellingsen Stenhagen
Board Member
Irene Kristiansen
Board Member
Phillip Austern
Board Member
45
Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2022Financials
Consolidated Statement of Profit or Loss
Note Year ended December 31
(NOK 1,000) 2022 2021
Revenue 3 867 056 805 518
Cost of sale 93 820 76 940
Salary and personnel expenses 4,23,24 719 687 634 422
Other operating expenses 5 237 544 218 615
Other gains/losses 31 61 290 -161
EBITDA -245 285 -124 297
Depreciation and amortization and impairment 9,10,12 115 120 73 726
Operating profit or loss -360 405 -198 023
Financial income 6 7 959 517
Financial expenses 6 -4 604 -4 638
Net gain and loss on foreign exchange differences 6 40 264 6 897
Financial income/(expenses) - net 43 619 2 776
Profit or loss before income tax -316 786 -195 247
Income tax expense 7 -54 538 -37 923
Profit or loss for the year -262 248 -157 324
Profit or loss is attributable to:
Owners of Pexip Holding ASA -262 248 -157 324
Earnings per share
Basic earnings per share 8 -2.58 -1.53
Diluted earnings per share 8 -2.58 -1.53
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Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2022Financials
Consolidated Statement of Comprehensive Income
Year ended December 31
(NOK 1,000) 2022 2021
Profit or loss for the year -262 248 -157 324
Items that may be reclassified to profit or loss:
Exchange difference on translation of foreign operations 11 417 2 988
Total comprehensive income for the year -250 831 -154 336
Total comprehensive income is attributable to:
Owners of Pexip Holding ASA -250 831 -154 336
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Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2022Financials
Consolidated Statement of Financial Position
(NOK 1,000) Note 12/31/2022 12/31/2021
ASSETS
Non-current assets
Property, plant and equipment 3,9 29 039 36 033
Right-of-use assets 3,10 77 154 103 362
Goodwill 11 662 645 662 645
Other intangible assets 3,12 178 606 138 920
Deferred tax asset 7 169 279 109 096
Contract costs 3,18 285 779 262 076
Receivables 4,13,19 1 602 6 859
Other assets 4 041 1 522
Total non-current assets 1 408 145 1 320 512
Current assets
Trade and other receivables 4,13,19 198 727 217 875
Contract assets 18 37 233 17 431
Other current assets 14 23 326 27 913
Cash and cash equivalents 15,19 419 306 803 852
Total current assets 678 592 1 067 071
TOTAL ASSETS 2 086 736 2 387 582
(NOK 1,000) 12/31/2022 12/31/2021
EQUITY AND LIABILITIES
Equity
Total equity 16 1 596 571 1 908 191
Non-current liabilities
Borrowings 17,19 16 4 000
Lease liabilities 10,19 57 560 84 782
Deferred tax liabilities 7 15 388 12 338
Other payables 19 2 526 2 703
Total non-current liabilities 75 490 103 824
Current liabilities
Trade and other payables 19,21 148 153 138 586
Contract liabilities 18 231 004 202 302
Current tax liabilities 7 5 002 3 935
Borrowings 17,19 4 077 2 000
Lease liabilities 10,19 26 439 28 745
Total current liabilities 414 675 375 567
Total liabilities 490 166 479 392
TOTAL EQUITY AND LIABILITIES 2 086 736 2 387 582
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Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2022Financials
Oslo, March 28, 2023
Board of Directors and CEO of Pexip Holding ASA
Michel Sagen
Chair of the Board
Per Haug Kogstad
Board Member
Irene Kristiansen
Board Member
Phillip Austern
Board Member
Kjell Skappel
Vice-Chair of the Board
Asta Ellingsen Stenhagen
Board Member
Marianne Wergeland Jenssen
Board Member
Trond K. Johannessen
CEO
49
Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2022Financials
Consolidated Statement of Changes in Equity
(NOK 1,000) Note Share
capital
Share
premium
Other
reserves
Translation
differences
Retained
earnings
Total
equity
Balance at January 1, 2021 1 523 2 027 206 134 383 -6 541 -134 446 2 022 125
Profit or loss for the year 0 0 0 0 -157 324 -157 324
Other comprehensive income for the year 0 0 0 2 988 0 2 988
Total comprehensive income for the year 0 0 0 2 988 -157 323 -154 336
Capital increase/share issue 16 43 88 732 255 0 0 89 030
By/sell treasury share 16 -10 0 -78 984 0 0 -78 994
Share-based payments 24 0 0 30 365 0 0 30 365
Balance at December 31, 2021 1 556 2 115 938 86 018 -3 553 -291 770 1 908 191
Balance at January 1, 2022 1 556 2 115 938 86 018 -3 553 -291 770 1 908 191
Profit or loss for the period 0 0 0 0 -262 248 -262 248
Other comprehensive income for the year 0 0 0 11 416 0 11 416
Total comprehensive income for the year 0 0 0 11 416 -262 248 -250 831
Capital increase/share issue 16 0 0 -270 0 0 -270
By/sell treasury share 16 -35 0 -87 404 0 0 -87 439
Share-based payments 24 0 0 26 920 0 0 26 920
Balance at December 31, 2022 1 521 2 115 938 25 265 7 863 -554 018 1 596 571
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Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2022Financials
Consolidated Statement of Cash Flows
Year ended December 31
(NOK 1,000) Note 12/31/2022 12/31/2021
Cash flow from operating activities
Profit or loss before income tax -316 786 -195 247
Adjustments for
Depreciation, amortization and net impairment losses 9,10,12 115 120 73 726
Non-cash - share based payments 24 25 130 30 365
Interest income/expenses - net 6 -3 952 3 710
Net exchange differences 6 -18 656 -2 962
Change in operating assets and liabilities
Change in trade, other receivables and other assets 4,13,19 -19 134 -90 655
Change in trade, other payables and contract liabilities 19,21 31 688 26 701
Interest received 6 7 958 41
Income taxes paid/refunded 7 -3 843 -1 001
Net cash inflow/outflow from operating activities -182 475 -155 321
Cash flow from investing activities
Payment for property, plant and equipment 9 -21 965 -35 324
Payment of software development cost 12 -32 318 -48 308
Payment for acquisition of subsidiary, net of cash acquired 30 -56 009 -15 193
Net cash inflow/outflow from investing activities -110 292 -98 825
Cash flow from financing activities
Proceeds from issuance of ordinary shares 16,20 0 94 486
Repayment of borrowings 17,20 -1 919 -34 689
Principal element of lease payments 10,20 -27 399 -13 688
Interest paid 6 -4 006 -3 751
Sale/(purchase) of treasury shares 16 -87 674 -87 995
Net cash inflow/outflow from financing activities -120 998 -45 637
Net increase/(decrease) in cash and cash equivalents -413 765 -299 784
Cash and cash equivalents start of the period 803 852 1 100 656
Effects of exchange rate changes on cash and cash equivalents 29 219 2 979
Cash and cash equivalents end of the period 419 306 803 852
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Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2022Financials
Note 1. General
Group. The Group includes the parent company Pexip
Holding and its wholly owned subsidiary Pexip AS,
which have the wholly owned subsidiaries Pexip Inc,
Pexip Ltd, Videxio Asia Pacific Ltd, Pexip Australia Pty
Ltd, Pexip Singapore Pte Ltd, Pexip France SAS, Pexip
Germany GmbH, Pexip Netherlands B.V, Pexip Belgium
NV, and Pexip Japan GK. The Group`s head office is
located at Lilleakerveien 2a, 0283 OSL O , Norwa y .
Pexip Holding ASA is a public listed company on the Oslo
Stock Exchange (Norway ) under the ticker PEXIP.
software application and as-a-service deployment
options for enterprise video conferencing, built on
Pexip’s proprietary Infinity technology. Both offerings
are delivered as a recurring subscription-based model.
The consolidated financial statements of Pexip
Group) for the year ended December 31, 2022 was
authorized for issue by a resolution of the directors
on March 28, 2023.
1.1 Adoption of new and revised accounting
standards
The Group has applied the following standards and
amendments for the first time in the annual report
period commencing on January 1, 2022:
• Property, Plant and Equipment: Proceeds before
Intended Use – Amendments to IAS 16
• Onerous Contracts - Cost of Fulfilling a Contract –
Amendments to IAS 37
• Annual Improvements to IFRS Standards 2018-
2020
• Reference to the Conceptual Framework –
Amendments to IFRS 3
The amendments listed above did not have any
material impact to the current financial statement
presented in this report and is not expected to affect
future accounting periods.
1.1.2 New and revised IFRS standards are issued but
not yet effective
The Group has not early adopted new and revised IFRS
standards published but not mandatory for December
31, 2022 reporting periods.
The Group does not expect that the adoption of
these Standards will have a material impact on the
financial statements in future periods.
Note 2. Accounting principles
2.1 Basis for preparation
The financial accounts for Pexip Holding ASA “the
Parent company” together with its subsidiary
Pexip AS, and its wholly-owned and controlled
subsidiaries, together called “the Group”, have been
prepared following International Financial Reporting
Standards as adopted by the EU(IFRS), relevant
interpretations, and the Norwegian Accounting Act.
The consolidated financial statements have been
prepared on a historical cost basis, except where
IFRS explicitly requires the use of other values.
The Parent company has NOK as its functional
currency; the financial accounts are presented in
NOK, rounded to the nearest thousand if nothing
else is noted. As a result of the rounding differences,
it is possible that amounts and percentages do not
add up to the total.
2.2 Basis of consolidation
The consolidated financial statements comprise
the Parent Company’s financial statements and
subsidiaries as of December 31, 2022.
Control is established when the Parent Company is
exposed to, or has rights to, variable returns from its
involvement with the entity and could affect those
returns through its power over the entity.
Consolidation is done using the acquisition method
and begins when control over the subsidiary is
obtained. The consolidation stops when the control
ceases.
Where necessary, adjustments are made to the
financial statements of subsidiaries to bring the
accounting policies used into line with the Group’s
accounting policies.
Intercompany transactions, balances, and unrealized
gains on transactions between group companies
are eliminated. Unrealized losses are also eliminated
unless the transaction provides evidence of an
impairment of the transferred asset.
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Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2022Financials
Profit or loss and each component of other
comprehensive income (OCI) are attributed to the
equity holders of the Parent Company.
If the Group loses control over a subsidiary, it
derecognizes the related assets (including goodwill),
liabilities, non-controlling interest, and other equity
components, while any resultant gain or loss is
recognized in profit or loss. Any investment retained
is recognized at fair value.
A change in the ownership interest of a subsidiary,
without a loss of control, is accounted for as an
equity transaction.
2.3 Summary of significant accounting
policies
2.3.1 Business combinations and goodwill
The acquisition method of accounting is used
to account for all business combinations. The
consideration transferred for the acquisition of a
subsidiary comprises the:
• fair values of the assets transferred.
• liabilities incurred to the former owners of the
acquired business.
• equity interests issued by the group.
• fair value of any asset or liability resulting from a
contingent consideration arrangement, and
• fair value of any pre-existing equity interest in
the subsidiary.
On the acquisition date, the identifiable assets
acquired and the liabilities assumed are recognized
at their fair value, except for:
• Deferred tax assets or liabilities are recognized
and measured under IAS 12 - Income taxes.
• Liabilities or equity instruments related
to share-based payment arrangements
of the acquiree, or share-based payment
arrangements of the Group entered to replace
share-based payment arrangements of the
acquiree, are measured per IFRS 2 at the
acquisition date.
• the value of a reacquired right is recognized
as an intangible asset based on the remaining
contractual term of the related contract
regardless of whether market participants
would consider potential contractual renewals
when measuring its fair value.
Acquisition-related costs are recognized in profit or
loss as incurred.
Contingent consideration is classified either as
equity or financial liability. Amounts classified as
financial liabilities are subsequently remeasured to
fair value, with changes in fair value recognized in
profit or loss.
Goodwill is measured as the excess of the sum of
the consideration transferred over the fair value
of the net of the acquisition date amounts of the
identifiable assets acquired, and the liabilities
assumed.
Goodwill arising in a business combination is
not amortized. Initially, goodwill is recognized at
cost. Thereafter, goodwill is measured at cost less
accumulated impairment. For the purpose
of impairment testing, goodwill acquired in a
business combination is, from the acquisition date,
allocated to each of the Group’s cash-generating
units that are expected to benefit from the
combination, irrespective of whether other assets
or liabilities of the acquiree are assigned to those
units. The carrying amount of goodwill is tested for
impairment at least annually. Impairment losses are
recognized directly in profit for the year and are not
subsequently reversed.
2.3.2 Foreign currencies
Transactions and balances
Transactions in foreign currencies are translated
into the respective functional currencies of Group
companies at the exchange rates at the dates of the
transactions.
Monetary assets and liabilities denominated in
foreign currencies are translated into the functional
currency at the exchange rate at the reporting date.
Differences in settlement or translation of monetary
items are generally recognized in profit or loss.
Non-monetary assets and liabilities measured at fair
value in a foreign currency are translated into the
functional currency at the exchange rate when the
fair value is determined.
Non-monetary items that are measured based
on the historical cost in a foreign currency are
translated at the exchange rate at the date of the
transaction. The gain or loss arising on translation
of non-monetary items measured at fair value is
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treated in line with the recognition of the gain or
loss on the change in fair value of the item (i.e.,
translation differences on items whose fair value
gain or loss is recognized in OCI or profit or loss are
also recognized in OCI or profit or loss, respectively.)
Group companies
The Group’s presentation currency is NOK. The
results and financial position of foreign operations
that have a functional currency different from
the presentation currency are translated into the
presentation currency as follows:
• assets and liabilities for each balance sheet
presented are translated at the closing rate at
the date of that balance sheet.
• income and expenses for each statement of
profit or loss and statement of comprehensive
income are translated at average exchange
rates (unless this is not a reasonable
approximation of the cumulative effect of the
rates prevailing on the transaction dates, in
which case income and expenses are translated
at the dates of the transactions), and
• all resulting exchange differences are
recognized in other comprehensive income.
2.3.4 Current versus non-current classification
An asset is classified as current when it is expected
to be realized or intended for sale or consumption
in the Group’s normal operating cycle. It is held
primarily to be traded or expected/due to be realized
or settled within twelve months after the reporting
date. Other assets are classified as non-current.
A liability is classified as current when it is expected
to be settled in the Group’s normal operating
cycle, is held primarily to be traded, the liability
is due to be settled within twelve months after
the reporting period or if the Group does not
have an unconditional right to defer settlement
of the liability for at least twelve months after the
reporting period. All other liabilities are classified as
non-current.
Deferred tax assets and liabilities are classified as
non-current assets and liabilities.
2.3.5 Revenue from contracts with customers
Revenue from contracts with customers is
recognized when control of the goods or services
are transferred to the customer at an amount that
reflects the consideration to which the Group
expects to be entitled in exchange for those goods
and services.
Revenue from the sale of software licenses
Infinity software licenses are classified as software
licenses where the customer is provided with a right
to use the software as it exists when made available
to the customer. Revenue from distinct software
licenses is recognized at the point in time when the
software is made available to the customer and the
right to use the software has commenced. Most of
the Infinity license agreements with customers are
annual contracts. Invoices are generated when the
license key is made available to the customers (at a
point in time), and most invoices are payable within
30 days.
Revenue from the sale of cloud services
Cloud service licenses, “software as a service”,
entitle the customers to use the Pexip software
together with the Group’s IP and production
network over the contract period. Revenues from
the sale of Cloud Services are recognized overtime
on a straight-line basis over the license period.
Approximately 30% of the Cloud service license
agreements with customers are ongoing monthly
contracts; the rest are mainly yearly contracts.
Invoices are generated monthly or yearly, and most
invoices are payable within 30 days.
Partner fees
The Group has a partner program that provides the
partner with the right to sell the Group’s services.
The partner receives support, training and access to
the service, and the performance obligations related
to partner fees are satisfied on an ongoing basis.
Revenue related to partner fees is thus recognized
linearly over time.
Most of the partner fees are invoiced, as are annual
agreements. Invoices are generated at contract
inception and payable within 30 days.
Revenue from the sale of support and maintenance
The Group offers support and maintenance
services to its customers. For services related to
the software licenses, the performance obligations
related to support and maintenance are satisfied on
an ongoing basis, and revenue related to the sales
of services are thus recognized on a linear basis
over time.
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Most of the maintenance and support agreements
are related to the license period. Proof of concept
(POC) is a professional service offered for up to 6
months. Revenue from these contracts is recognized
linearly throughout the contract period. The Group
also has customers with service contracts of 1-3
months. Revenues related to the sale of services are
recognized on a linear basis over time.
Transaction price
The Group determines the transaction price to be
the amount of consideration which it expects to be
entitled in exchange for transferring the promised
goods and services to the customer, net of discounts
and sales-related taxes.
Sales related taxes are regarded as collected
on behalf of the authorities. When the contract
includes a variable amount, the Group estimates
the amount of consideration expected to receive
from the customer using either the expected value
method or the most likely method. The method
is used consistently throughout the contract.
The Group has few contracts with variable
consideration.
The Group uses the practical expedient in IFRS
15 not adjust for a financing component. Where
applicable, the variable consideration is estimated
using the most likely amount method. The estimate
is revised and updated every quarter.
The Group considers whether there are other
promises in the contract that are separate
performance obligations to which a portion of the
transaction price needs to be allocated.
Contract balances
Contract balances consist of client-related
assets and liabilities. Contract assets relate to
consideration for work completed but not yet
invoiced at the reporting date. The contract assets
are transferred to trade receivables when the right
to payment has become unconditional, usually when
invoices are issued to the customers.
When a client pays consideration in advance, or an
amount of consideration is due contractually before
transferring of the license or service. The amount
received in advance is presented as a liability.
Contract liabilities represent mainly prepayments
from clients for unsatisfied or partially satisfied
performance obligations concerning licenses
and services.
Contract assets are within the scope of impairment
requirements in IFRS 9. For contract assets, the
simplified approach is applied, and the expected loss
provision is measured at the estimate of the lifetime
expected credit losses.
Costs of obtaining or fulfilling contracts with
customers
The Group pays sales commission to its employees
based on actual sales. Commissions that are
incremental costs of obtaining a contract with a
customer are recognized as an asset if the costs are
expected to be recovered. Subsequently, the asset is
amortized on a systematic basis consistent with the
transfer to the customer of the goods or services to
which the asset relates. This is usually the expected
total contract period and includes expected
renewals. The expected contract period is seven and
half years for software licenses and about five years
for Cloud services. Further information regarding
commission and salary is disclosed in note 4.
2.3.6 Government grants
Government grants are recognized with reasonable
assurance that the grant will be received, and all
attached conditions will be complied with. When
the grant relates to an asset, it reduces its carrying
amount. The grant is then recognized in profit or
loss over the useful life of the depreciable asset by
way of a reduced depreciation charge.
2.3.7 Employee benefits
Share Based payment transactions
The Group provides incentives to employees in the
form of equity-settled share-based instruments. The
Company has two incentive programs: share-based
programs for employees and management and key
employees.
Equity-settled share options are measured at fair
value at the grant date and recognized in the income
statement under salary and personnel expenses over
the period—the final right of the options vest. The
balancing item is recognized directly in equity.
The number of options expected to vest at expiry is
estimated on the initial recognition of share options.
Subsequently, the estimated number of vested
options is revised for changes so that the total
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recognition is based on the actual number of vested
options.
The fair value of the options granted is estimated
using the Black-Scholes model with the parameters
stated in note 24.
The dilutive effect of outstanding options is
reflected as additional share dilution in diluted
earnings per share (further details are given in
note 8).
Termination benefits
Termination benefits are payable when employment
is terminated by the group before normal retirement
date, or when the employee accepts voluntary
redundancy in exchange for these benefits.
The group recognized termination benefits at
the earliest of a) when the group no longer can
withdraw the offer of termination benefits and b)
when the Group recognizes a restructuring cost
according to IAS 37 that involves termination
benefits. In the case where not all employees have
signed a termination contract as of reporting period,
Pexip will measure the remaining termination
benefits based on expected number of employees
that will accept the offer.
2.3.8 Other intangible assets
Intangible assets other than goodwill acquired
separately are measured on initial recognition at
cost. Other intangible assets include software,
trademarks, and client contracts. The cost of
intangible assets acquired in a business combination
is their fair value at the date of acquisition.
Following initial recognition, intangible assets are
carried at cost less any accumulated amortization
and accumulated impairment losses.
Intangible assets with finite useful lives are
amortized straight-line over their estimated useful
lives. The amortization expense is recognized in the
statement of profit or loss. The estimated useful
life and amortization method is reviewed at the
end of each reporting period, with the effect of any
changes on estimates being accounted for on a
prospective basis.
Gains or losses arising from the derecognition of
an intangible asset are measured as the difference
between the net disposal proceeds and the
asset’s carrying amount. They are recognized in
the statement of profit or loss when the asset is
derecognized.
The estimated useful lives of intangible assets are
as follows:
• Software: 5 years
• Client contracts: 5 years
• Trademarks: 5 years
Research and development costs
Development expenditures are capitalized only
when the criterion for recognition is met, i.e., that
it is probable that the expected future economic
benefits that are attributable to the asset will flow
to the entity, management has committed itself
to complete the asset, the technical feasibility of
completing the asset has been demonstrated, and
the cost can be measured reliably. The assets are
amortized over their expected useful life once the
assets are available for use. During the period of
development, the asset is tested for impairment
annually. Development costs that do not meet the
criteria for capitalization are expensed as incurred.
2.3.9 Property, plant, and equipment
Tangible assets are recorded at historical cost, less
accumulated depreciation, and possible impairment.
Depreciation is recorded on a straight-line basis
over the estimated useful life of an asset, which is
as follows:
• Land and buildings: 5 years
• Plant and machinery: 3 to 5 years
• Fittings and fixtures: 3 to 5 years
Gains or losses on the disposal of tangible assets
are included in the statement of profit or loss.
The residual values, useful lives, and methods of
depreciation of property, plant and equipment are
reviewed at each financial year-end and adjusted
prospectively, if appropriate.
2.3.10 Leases
The Group as lessee
The Group assesses whether a contract is or
contains a lease at the contract’s inception.
The Group recognizes a right-of-use asset and a
corresponding lease liability concerning all lease
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arrangements in which it is the lessee, except for
short-term leases (defined as leases with a lease
term of 12 months or less) and leases of low-value
assets (such as tablets and personal computers,
small items of office furniture and telephones).
For these leases, the Group recognizes the lease
payments as an operating expense on a straight-line
basis over the lease term. The Group
presents interest expense on lease liabilities under
finance expenses and the depreciation charge
on the right-of-use asset under depreciation and
amortization in the profit and loss statement.
Right-of-use assets are measured at cost, less any
accumulated depreciation and impairment losses
and adjusted for any remeasurement of lease
liabilities. The cost of right-of-use assets includes
the amount of lease liabilities recognized, initial
direct costs incurred, and lease payments made
at or before the commencement date less any
lease incentives received. Right-of-use assets are
depreciated on a straight-line basis over the shorter
of the lease term and the estimated useful lives of
the assets, as follows:
• Buildings: 2-10 years
• Equipment: 3-5 years
The right-of-use assets are also subject to
impairment. Refer to the accounting policies in
section 2.3.11 Impairment of intangible assets and
property, plant, and equipment.
The lease liability is initially measured at the present
value of the lease payments that are not paid at
the commencement date, discounted by using
the rate implicit in the lease. If this rate cannot be
readily determined, the Group uses its incremental
borrowing rate.
At the commencement date, the Group assesses
whether they are reasonably certain to exercise
an option to extend the lease or purchase the
underlying asset or not to exercise an option to
terminate the lease. This assessment is reflected in
the initial measurement of the lease contract.
The lease liability is subsequently measured by
increasing the carrying amount to reflect interest
on the lease liability (using the effective interest
method) and reducing the carrying amount to
reflect the lease payments made.
The lease liability and right-of-use asset are
presented as separate lines in the consolidated
statement of financial position.
2.3.11 Impairment of intangible assets and
property, plant, and equipment
Goodwill and intangible assets that have an
indefinite useful life are not subject to amortization
and are tested annually for impairment or more
frequently if events or changes in circumstances
indicate that the carrying amount might be
impaired. Other assets are tested for impairment
whenever events or changes in circumstances
indicate that the carrying amount may not be
recoverable. An impairment loss is recognized
as the amount by which the asset’s carrying
amount exceeds its recoverable amount. The
recoverable amount is the higher asset’s fair value,
lower disposal costs, and value in use. To assess
impairment, assets are grouped at the lowest
levels. There are separately identifiable cash inflows
largely independent of the cash inflows from other
assets or groups of assets (cash-generating units).
Non-financial assets other than goodwill that have
historically been impaired are reviewed for possible
reversal of the impairment at the end of each
reporting period. Disclosures relating to impairment
testing are found in note 11.
2.3.12 Taxes
The period’s income tax expense or credit is the
tax payable on the current period’s taxable income,
based on each jurisdiction’s applicable income tax
rate, adjusted for changes in deferred tax assets and
liabilities attributable to temporary differences, and
unused tax losses.
Current income tax
The current income tax charge is calculated based
on the tax laws enacted or substantively enacted
at the end of the reporting period in the countries
where the Group operates and generates taxable
income. Management periodically evaluates
positions taken in tax returns regarding situations
in which applicable tax regulation is subject to
interpretation. Management establishes appropriate
provisions based on amounts expected to be paid to
the tax authorities.
Deferred tax
Deferred income tax is provided in full, using the
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liability method, on temporary differences arising
between assets and liabilities’ tax bases and their
carrying amounts in the consolidated financial
statements. However, deferred tax liabilities are
not recognized if they emerge from the initial
recognition of goodwill. Deferred income tax is
determined using tax rates (and laws) that have
been enacted or substantially enacted by the end of
the reporting period and are expected to apply when
the related deferred income tax asset is realized, or
the deferred income tax liability is settled.
Deferred tax assets are recognized only if it is
probable that future taxable amounts will be
available to utilize the temporary differences and
losses.
Deferred tax assets and liabilities are offset when
there is a legally enforceable right to offset current
tax assets and liabilities. The deferred tax balances
relate to the same taxation authority. Existing tax
assets and tax liabilities are offset. The entity has
a legally enforceable right to offset and intends to
settle on a net basis or realize the asset and settle
the liability simultaneously.
Current and deferred tax is recognized in the
income statement, except that it relates to items
recognized in other comprehensive income or
directly in equity.
2.3.13 Financial instruments
Financial assets and financial liabilities are
recognized in the Group’s statement of financial
position when the Group becomes a party to the
contractual provisions of the instrument.
Financial assets and financial liabilities are initially
measured at fair value plus transaction costs in
the case of a financial instrument not at fair value
through profit or loss.
The Group has classified its financial instruments
as either measured at amortized cost or fair value
through profit or loss for subsequent measurement.
The classification depends on the Group’s business
model for managing them and the contractual cash-
flow characteristics of the instrument.
Financial liabilities subsequently measured at fair
value through profit or loss include the line-item
Derivative financial liability in the statement of
financial position. Derivative financial liabilities are
measured at fair value at the end of each reporting
period. The gains or losses arising from the change
in fair value are recognized in the statement of profit
or loss.
At amortized cost, financial assets are held to
collect the contractual cash-flow and where the
cash-flows are solely payments of principal and
interest on the outstanding principal. The category
is included in the consolidated statement of
financial position financial line items Trade and other
receivables (current and non-current), Other assets,
Other current assets and cash and cash equivalents.
Non-current assets are measured at amortized cost
using the effective interest method, reduced by any
impairment loss. Due to their short-term nature, the
carrying amounts of line items classified as current
are assumed to be the same as their fair values.
Short-term loans and receivables are for practical
reasons not amortized unless the effect is material.
The category financial liabilities at amortized cost
are included in the consolidated statement of
financial position line items Borrowings (current
and non-current), and Trade and other payables.
Non-current financial liabilities are measured at
amortized cost using the effective interest method.
Effective interest is recognized in the income
statement as financial expenses. Fees paid on the
establishment of loan facilities are recognized
as transaction costs of the loan. Borrowings and
trade and other payables are removed from the
balance sheet when the obligation in the contract
is discharged. Current items in the category are for
practical reasons not amortized unless the effect is
material.
Financial assets are derecognized when the
contractual rights to the cash flow from the
financial asset expire, and the Group has transferred
substantially all the risks and rewards of ownership.
If it is not apparent that the entity has transferred
or retained all risks and rewards substantially, the
Group evaluates by comparing the entity’s exposure,
before and after the transfer, with the variability
in the amounts and timing of the net cash flows
on the transferred asset. In the securitization
facility agreement to which the group is a party, the
receivables are derecognized (see note 13).
Financial liabilities are derecognized when the
obligation is discharged, cancelled or expires. Any
rights and obligations created or retained in such
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a transfer are recognized separately as assets or
liabilities.
The Group has applied the simplified approach in
IFRS 9 to measure the loss allowance at lifetime
ECL for trade receivables and contract assets. The
Group determines the expected credit losses on
these items by using a provision matrix, estimated
based on historical credit loss experience based
on the past due status of the debtors, adjusted
as appropriate to reflect current conditions
and estimates of future economic conditions.
Accordingly, the credit risk profile of these assets is
presented based on their past status in terms of the
provision matrix.
Financial assets and financial liabilities are offset
with the net amount reported in the consolidated
statement of financial position only if there is
a currently enforceable legal right to offset the
recognized amounts and an intent to settle on a net
basis or to realize the assets and settle the liabilities
simultaneously.
The fair value of financial instruments
The fair value of financial instruments is based on
quoted prices as at the balance sheet date in an
active market if such markets exist. If an active
market does not exist, fair value is established using
valuation techniques that are expected to provide a
reliable estimate of the fair value.
Financial instruments measured at fair value are
classified according to the valuation method:
Level 1: Valuation based on quoted prices
(unadjusted) in active markets for identical assets or
liabilities.
Level 2: Valuation based on inputs other than quoted
prices included within level 1 observable for the
asset or liability, either directly (that is, as prices) or
indirectly (that is, derived from prices).
Level 3: Valuation based on the asset or liability
inputs that are unobservable market data.
If one or more significant inputs are not based on
observable market data, the instrument is included
in level 3.
Changes in fair value are presented in profit or loss
in the line-item Financial expenses.
2.3.14 Cash and cash equivalents
Cash and cash equivalents comprise cash at banks.
2.3.15 Cash flow statement
The Group presents the statement of cash flows
using the indirect method. Cash inflows and
outflows are shown separately for investing and
financing activities, while operating activities
include cash and non-cash line items. Interest paid
is classified as cash flows from financing activities
and interest received as cash flows from operating
activities.
2.3.16 Earnings per share
Basic earnings per share
Basic earnings per share are calculated by dividing:
• the profit attributable to owners of the
company, excluding any costs of servicing equity
other than ordinary shares.
• by the weighted average number of ordinary
shares outstanding during the financial year,
adjusted for bonus elements in ordinary shares
issued and excluding treasury shares.
Diluted earnings per share
Diluted earnings per share adjust the figures used
in the determination of basic earnings per share to
consider:
• the after-income tax effect of interest and
other financing costs associated with dilutive
potential ordinary shares, and
• the weighted average number of additional
ordinary shares that would have been
outstanding assuming the conversion of all
dilutive potential ordinary shares.
2.3.17 Contributed Equity
Equity is presented as a single line item in the
balance sheet and is disclosed in the statement
of changes in Equity showing the reconciliation of
changes for each component of contributed Equity.
The components presented are the Group’s share
capital and premium, other reserves, translation
differences and retained earnings. Other reserves
include transactions related to shares such as
treasury shares, share based payments and similar
transactions. The Group has chosen to present
share capital as only the external owned shares.
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2.4 Significant accounting
judgements, estimates and
assumptions
Judgements
In the process of applying the Group’s accounting
policies, management has made the following
judgements, which have the most significant effect
on the amounts recognized in the consolidated
financial statements:
Determining the lease term of contracts with
renewal options – Group as lessee
The Group determines the lease term as the non-
cancellable term of the lease, together with any
periods covered by an option to extend the lease if it
is reasonably certain to be exercised, or any periods
covered by an option to terminate the lease if it is
reasonably certain not to be exercised.
The Group applies judgement in evaluating whether
it is reasonably sure to exercise the option to
extend. It considers all relevant factors that create
an economic incentive for it to exercise either the
renewal or termination. After the commencement
date, the Group reassesses the lease term if there
is a significant event or change in circumstances
that are within its control and affects its ability to
exercise or not to exercise the option.
The Group has not included the renewal period as
part of the lease term for the office lease as the
options are not reasonably certain to be exercised.
Refer to note 10 for information on potential future
rental payments relating to periods following the
exercise date of the extension option that is not
included in the lease term.
Estimates and assumptions
The key assumptions concerning the future and
other key sources of estimation uncertainty at the
reporting date that have a significant risk of causing
a material adjustment to the carrying amounts
of assets and liabilities within the next financial
year are described below. The Group based its
assumptions and estimates on parameters available
when the consolidated financial statements were
prepared. However, existing circumstances and
assumptions about future developments may
change due to market changes or circumstances
arising that are beyond the control of the Group.
Such changes are reflected in the assumptions
when they occur.
Impairment of assets
The Group has investments in intangible assets
such as customer contracts and internally generated
software, Goodwill, and Right-of-Use Assets (ROU
assets). Before each quarterly report, all assets are
assessed for any indication of impairment. If such
movement exists, the Group estimates the asset’s
recoverable amount according to IAS 36.
Factors that indicate impairment include significant
underperformance in revenue-generating operation
relative to historical data and future projections,
substantial changes in the use of the asset or any
malfunctions, substantial changes in the market and
economy, in general, affecting the future economic
benefit of the asset and significant fall in market
values.
Regardless of any indication of impairment,
Goodwill and internally generated intangible assets
not yet in use are tested for impairment in the fourth
quarter of the year (Q4).
The recoverable amount of an asset is the higher
its fair value, less cost of disposal, and its value
in use. Value in use is the present value of the
future cash flows expected from an asset. This
valuation consists of different estimates that the
Group makes, such as estimates of the future cash
flows the entity expects to derive from the asset,
expectations about possible variations in the amount
or timing of those future amounts, time value of
money and other relevant factors. All estimates
are based on reasonable, relevant, and supportable
information and represent the management’s best
estimate.
Deferred tax assets from tax losses
Deferred tax asset is recognized for the
carryforward of unused tax losses and unused tax
credits to the extent that it is probable that future
taxable profit will be available against which the
unused tax losses and tax credits can be utilized.
The Group has projected future taxable profits pr
jurisdiction for which the tax losses can be utilized
based on approved budgets and forecasts.
Refer to note 7 for further disclosures.
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Note 3 - Revenue and segment information
(NOK 1,000)
The Group has one segment, sale of collaboration services.The market for Pexip’s software and services is global. The
chief decision maker will therefore follow up revenue and profitability on a global basis. This is consistent with the internal
reporting submitted to the chief operating decision maker, defined as the Management Group. The Management Group is
responsible for allocating resources and assessing performance as well as making strategic decisions.
Principles of revenue recognition are stated in accounting principles to consolidated financial statements, section 2.3.5
Revenue from contracts with customers.
Disaggregation of revenue
In the following table, revenue is disaggregated by primary service line, geography and timing of revenue recognition. In
presenting the geographic information, revenue has been based on the geographic location of customers.
2022
EMEA
1)
Americas APAC
2)
Total
Pexip as-a-Service 235 619 146 790 25 773 408 181
Self-hosted software 236 286 170 156 52 433 458 875
Total revenue 471 905 316 946 78 206 867 056
2021
EMEA
1)
Americas APAC
2)
Total
Pexip as-a-Service 193 768 99 019 21 771 314 558
Self-hosted software 245 380 200 915 44 665 490 960
Total revenue 439 148 299 934 66 436 805 518
Full year
Timing of revenue recognition 2022 2021
Products and services transferred at a point in time 368 629 394 559
Products and services transferred over time 498 427 410 959
Total revenue 867 056 805 518
1)
Europe, Middle East and Africa
2)
Asia Pacific (East and South Asia, Southeast Asia and Oceania)
Information about major customers
The Group conducts its sales through channel partners. Of the Group’s total channel partner base per 2022, the five
largest represent approximately 28% of total revenue (21% per 2021), and the ten largest represent approximately 40%
(30% per 2021). No channel partner represent more than 10% of the Group’s revenue.
Information about share of recurring revenue from own products
Recurrring revenue from own products is defined as revenue from time-limited contracts where the purchase is recurring
in nature. Revenue from time-limited software subscriptions and related mandatory maintenance contracts are considered
recurring. Revenue from third-party software licences, perpetual software-licences and project-based professional
services, such as a customer-specific proof-of-concept project or installation project, are considered non-recurring.
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Non-current assets
The following geographic information of non-current assets is based on the geographic location of the
assets.
31/12/2022 31/12/2021
Norway 328 338 322 350
Europe (other than Norway) 95 155 89 588
Americas 116 276 108 027
APAC 30 808 20 425
Total non-current operating assets 570 578 540 390
Non-current assets for this purpose consist of property, plant and equipment, right-of-use assets, other
intangible assets and contract costs.
Note 4 - Salary and personnel expense and management remuneration
(NOK 1,000)
2022 2021
Wages and salaries 515 401 467 682
Social security tax 71 581 78 922
Commission employees 86 766 59 273
Share-based payment expense (note 24) 25 130 14 652
Pension costs (note 23) 45 639 38 762
Other personnel cost 15 255 13 638
Salary cost capitalised -40 084 -38 506
Total 719 687 634 422
2021 numbers for line item wages and salaries, social security tax, pension costs and other personnel cost have been
reclassified in 2022 in order for the 2021 and 2022 numbers to be comparable. Total salary and personnel expenses for year
2021 is unchanged.
Average number of labour-years employed during the year 516 467
Commission employees
Commission cost has increased due to change of accounting and cost principle.
Loan to employees
The Group provided unsecured loans to employees of NOK 192 thousand at December 31, 2022 (2021: NOK 554 thousand).
The repayment schedule is 2 years and the interest rate is 2%.
Management remuneration
The remuneration to management is disclosed in the management remuneration report for 2022.
Bonus agreements and severance pay
The bonus scheme and severance pay for Group management is disclosed in the management remuneration report
for 2022.
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Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2022Financials
Note 5 - Other Operating Expenses
(NOK 1,000)
Note 6 - Financial Income and expenses
(NOK 1,000)
2022 2021
Sales and marketing 55 891 56 754
Computers and software 53 243 61 668
Fees for external services 62 901 58 890
Travel expenses 23 820 9 243
Other operating expenses 41 047 32 056
Other lease expense 642 -
Total 237 544 218 615
Auditor’s fees
The remuneration breakdown (excl. VAT) paid to Deloitte AS and their associates are as follows:
2022 2021
Statutory audit 4 506 4 920
Other certification services 121 80
Tax advisory services -
Other services - -
Total 4 627 5 000
2022 2021
Interest income 7 958 517
Other financial income 1
Financial income 7 959 517
Interest expense -900 -1 878
Interest expense on lease liabilities (note 10) -3 106 -2 110
Other financial expenses -598 -650
Financial expenses -4 604 -4 638
Net foreign currency gains and losses 40 264 6 897
Net financial income(expense) 43 619 2 776
Remuneration to board of directors in the parent company
The remuneration to board of directors is disclused in the management remuneration report for 2022.
Share option plan
The Group has share-based payment programs to employees. The share option plan is further presented in note 24.
An overview of management share options is disclused in the management remuneration report for 2022.
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Note 7 - Income tax expense
(NOK 1,000)
Specification of income tax expense: 2022 2021
Current tax on profits for the year 4 992 4 169
Changes in deferred tax -59 590 -41 992
Adjustments for current tax of prior periods 61 -99
Effect of changes in tax rules and rates -
Tax on profit/(loss) -54 538 -37 923
Reconciliation from nominal to effective income tax rate: 2022 2021
Profit/(loss) before tax -316 786 -195 246
Estimated income tax according to nominal tax rate of 22 % -69 693 -42 954
Effect from different tax rate in other countries -1 054 -9
Effect of changes in tax rules and rates -184 819
The tax effect of the following items: -
Non-deductible expenses -19 803 9 421
Non-taxable income 24 852 -211
Share-based payment expenses - -6 294
Adjustments for prior period tax - -62
Other items 2 629 1 369
Income tax expense -54 538 -37 923
Effective income tax rate 17% 19%
Changes in tax rate
There are no material changes in tax rates in the Group for 2022
Amounts recognised directly in equity 2022 2021
Deferred tax: Tax on share issue costs -
Deferred tax balances: 12/31/2022 12/31/2021
Deferred tax assets:
Tax losses 211 324 157 375
Tangible and intangible assets -11 651 5 239
Receivables 1 193 1 023
Contract liabilities 26 947 5 270
Current and non-current liabilities 13 457 28 890
Other - -157
Set-off tax -47 630 -70 836
Net deferred tax assets after set-off 193 640 126 805
Unrecognised deferred tax assets -24 361 -17 709
Net deferred tax assets 169 279 109 096
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Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2022Financials
Deferred tax liabilities:
Tangible and intangible assets 63 018 83 174
Current assets - -
Contract liabilties - -
Other differences - -
Set-off tax -47 630 -70 836
Net deferred tax liabilities 15 388 12 338
Deferred tax assets Movements Tax losses
Contract
liabilities
Current and non-
current liabilities Other Total
At January 2022 157 375 5 270 28 890 6 106 197 641
(Charged)/credited
- to profit or loss 47 297 21 677 -15 433 -16 564 36 977
- to other comprehensive
income
- directly to equity
- not recognized 6 652 6 652
At December 2022 211 324 26 947 13 457 -10 458 241 270
Deferred tax liability Movements
Tangible &
intangible
assets
Current
assets
Contract
liabilities
Other
differences Total
At January 2022 83 174 - 83 174
(Charged)/credited
- to profit or loss -20 156 - - - -20 156
- to other comprehensive income
- directly to equity -
- not recognized -
At December 2022 63 018 - - - 63 018
Utilisation of taxable temporary differences are assessed by taxation authority and by taxable entity if the temporary
differences can’t be utilised across different entities within the same taxation authority. As of December 31, 2022 and 2021
a deferred tax asset is recognised for all the individual taxation authorities where the Group conduct business.
The deferred tax asset is included in the balance sheet based on an assessment of the probability that sufficient taxable
profit will be available in the future to allow the deferred tax asset to be utilised.
Deferred tax assets on tax losses arising in Norway, the US and UK, in total NOK 191.2 million as at December 31, 2022
(2021: NOK 143.9 million) have been recognised based on the same assessment of the probability for sufficient taxable
profit in the future.
Temporary differences relating to the Skedify acquisition for which deferred tax assets have not been recognised was in the
amount of NOK 24.3m in 2022 (2021: 17.7m).
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Tax losses carried forward 12/31/2022 12/31/2021
Expire (2035 and forward) 20 354 61 011
Never expires 885 170 625 766
Total tax losses carried forward 905 525 686 777
Tax losses for which deferred tax asset is recognised 801 691 647 126
Tax losses for which no deferred tax asset is recognised 80 516 39 651
Potential tax benefit 20 129 13 477
Tax losses incurred in the US after January 1, 2018 do not expire, but are limited to 80% usage in one year. Tax losses carried
forward from the US business with no expiration date amount to NOK 43.8 million at December 31, 2022 (December 31,
2021: NOK 50.1 million). The expiring tax losses have priority over the never-expiring losses and are used earliest-first. The
main part of the losses carried forward is from Pexip Holding ASA (NOK 161 million) and Pexip AS (NOK 583 million).
Note 8 - Earnings per share
(NOK 1,000)
Earnings 2022 2021
Earnings for the purpose of basic earnings per share being
net profit attributable to the owners of the company -262 248 -157 324
Effect of dilutive potential ordinary shares
Earnings for the purpose of diluted earnings per share -262 248 -157 324
Number of shares
Weighted average number of ordinary shares for the purpose
of basic earnings per share 101 495 376 103 092 229
Effect of dilutive potential ordinary shares:
Share options 122 044 1 458 102
Weighted average number of ordinary shares for the purpose
of diluted earnings per share 101 617 420 104 550 331
Earnings per share
Basic earnings per share -2.58 -1.53
Diluted earnings per share -2.58 -1.53
12/31/2022 12/31/2021
Overview of outstanding share options
Share-based payments awards (refer to note 24) 5 252 950 5 225 178
Option over own equity instruments (refer to note 21)
Total options and RSUs outstanding 5 252 950 5 225 178
Dilutive potential ordinary shares of 122.044 for 2022 (2021: 1.458.102) differs from total outstanding options at December
31, 2022 (and December 31, 2021). The main reasons for this is that potential ordinary shares used to calulated diluted
earnings per share are a weighted average for the year, the use of the treasury method when calculating dilutive potential
ordinary shares and that the options over own equity instruments are anti-dilutive.
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Note 9 - Property, plant & equipment
(NOK 1,000)
Plant and
machinery
Fittings and
fixtures Total
Acquisition cost January 1, 2021 12 339 24 195 36 534
Additions 5 625 17 522 23 244
Aquisitions 725 - 725
Exchange differences 65 74 139
Acquisition cost December 31, 2021 18 754 41 791 60 643
Additions 2 545 6 755 9 300
Aquisitions - - -
Exchange differences 1 0 2
Acquisition cost December 31, 2022 21 300 48 547 69 945
Accumulated depreciation andimpairment losses January 1, 2021 4 601 6 756 11 358
Disposals - -
Depreciation for the period 4 938 8 203 13 112
Exchange differences -45 -21 -65
Accumulated depreciation and impairment losses December 31, 2021 9 493 14 939 24 404
Depreciation for the period 6 089 10 207 16 295
Exchange differences 1 -1 1
Accumulated depreciation and impairment losses December 31, 2022 15 583 25 145 40 700
Carrying value at December 31, 2021 9 260 26 852 36 033
Carrying value at December 31, 2022 5 717 23 402 29 039
Estimated useful life and depreciation plan is as follows:
Useful life 3 - 5 years 3 - 5 years
Depreciation plan Linear Linear
Property, plant and equipment is pledged as security for liabilities, refer to note 17 - Borrowings.
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Note 10 - Leases
(NOK 1,000)
Set out below are the carrying amount of right-of-use assets recognised and the movements during the period:
Land and
Buildings
Plant and
machinery Total
As at January 1, 2021 81 339 6 426 87 765
Additions (new leases) 30 058 2 903 32 961
Adjustments 1 792 - 1 792
Depreciation expense -17 666 -1 746 -19 412
Exchange differences 461 - 461
As at December 31, 2021 95 779 7 583 103 362
Additions (new leases) 2 757 438 3 195
Adjustments -6 852 - -6 852
Depreciation expense -21 543 -2 418 -23 961
Exchange differences 1 273 138 1 411
As at December 31, 2022 71 413 5 741 77 154
Lower of remaining lease term or useful life 2-10 years 3-5 years
Depreciation method Linear Linear
Set out below are the carrying amounts of lease liabilities and the movements during the period:
2022 2021
As at January 1 113 527 92 349
Additions (new leases) 3 195 32 961
Adjustments -6 859 1 425
Principal element of lease payments -27 399 -13 688
Exchange differences 1 536 480
As at December 31 83 999 113 527
Maturity analysis of lease liabilities 12/31/2022 12/31/2021
Less than 6 months 12 525 16 454
6-12 months 12 717 13 431
1-2 years 20 725 25 114
2-5 years 32 273 47 764
Over 5 years 10 199 22 080
Total face value 88 440 124 844
Carrying amount 83 999 113 527
Current 26 439 28 745
Non-current 57 560 84 782
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The following are the amounts recognised in profit or loss and other comprehensive income:
2022 2021
Depreciation expense for the right-of-use asset 23 942 19 412
Interest expense on lease liabilities 2 896 2 113
Exchange difference (included in OCI) 66 -69
Exchange difference (included in financial income) 1 536 69
Expense related to short-term leases (included in other operating expenses) 625 925
Total amount recognised in profit or loss 29 065 22 450
The Group had total cash outflows for leases of NOK 30.9 million in 2022 (NOK 16.6 million in 2021).
An incremental borrowing rate (IBR) of Nowa + 3% has been applied on all new leases during the 2022 accounting year. We
have selected Nowa as the risk-free rate as a starting point to determine the IBR. We have also chosen to apply a constant
financing spread adjustment of 3% to a portfolio of leases with reasonably similar characteristics (such as leases with a
similar class of underlying assets). This approach will change if we observe the material differences in financing costs in the
specific region we operate.
Refer to note 2.3.10 for a summary of significant accounting policies and note 2.4 for significant accounting judgements,
estimates and assumptions for the Group leases.
Extension and purchase options
The Group’s lease of lands and buildings have lease terms that vary from 16 months to 10 years, and some agreements
involve a right of renewal which may be exercised during the last period of the lease term. The Group assesses whether it is
reasonably certain to exercise the renewal right at the commencement date. The Group’s potential future lease payments
not included in the lease liabilities related to extension options is NOK 14.8 million (gross) on December 31, 2022 (NOK 13.3
million on December 31, 2021).
The Group leases plant and machinery with 3 to 5 years lease terms. These contracts include a right to purchase the asset
at the end of the contract term. The Group assesses whether it is reasonably certain to exercise the purchase option at the
commencement date. The Group has estimated that all the purchase options will be exercised. No potential future lease
payments are included in the lease liabilities related to purchasing options on December 31 in 2022 and 2021.
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Note 11 - Goodwill
(NOK 1,000)
Goodwill
Carrying amount of Goodwill December 31, 2021 662 645
Carrying amount of Goodwill December 31, 2022 662 645
The carrying amount of goodwill in the Group amounts to NOK 662.7 million as of December 31, 2022. Goodwill is derived
from the acquisition of Videxio AS (599 million), which was completed in 2018, and the acquisition of Skedify (NOK 63.7
million), which was completed on 8th November 2021.Goodwill is tested on an aggregate (Group) level since the synergies
stemming from the business combination will materialize on the group level.
The carrying amount of customer relations is also derived from the acquisition of Skedify and is an estimate of the value of
acquired customer databases. The intangible assets attributable to customer relationships are expected to be amortised
over a period of twenty years.
Goodwill is tested for impairment annually or more frequently if there are indications that goodwill might be impaired.
Testing was most recently conducted in Q4 2022 based on the updated business plan for the company at this time. The
recoverable amount is set to the estimated value in use. The value in use is the net present value of the estimated cash flow
before tax, using a discount rate reflecting the timing of the cash flows and the expected risk.
Assumptions
Future cash flows
Revenue development and operating profits are estimated based on past performance and management expectations for
2023 to 2027. The expectations for the overall economic conditions and market outlook are in line with industry analysts,
expecting continued strong growth within the collaboration market. The revenue assumptions have been adjusted
downwards from the impairment test in 2021, as has the cost estimates. This is in line with the stated strategy and current
financial targets of the company. Capital investments and depreciation are estimated to align with historic values relative to
revenues.
Pre-tax discount rate
Cash flows were discounted to a weighted average cost of capital (WACC) corresponding to 11.27% (before tax). The asset
beta is based on the average of peer companies in the segment with a small company premium. The risk-free interest rate
applied is the the daily observable rate for the 10-year Norwegian government bonds, dated 15th December, i.e. the day of
accepting the 2023 budget by the Board. The long-term optimal weight of equity of 95% is used in WACC calculation.
Growth rate
The expected growth in revenue is based on historical performance as well as the expected future development in line with
the Company’s approved business plan. This includes management’s best estimate of cash flows for the next 5 years. Cash
flows beyond the five-year forecast period have been extrapolated using a steady 2.934% per annum growth rate, in line
with the risk-free rate.
Sensitivity analysis
Review for the CGU indicated that the recoverable amount exceeds carrying value by NOK 71 million. The Group has
prepared a sensitivity analysis of the impairment test for key assumptions: terminal growth rate, discount rate and EBITDA
change.
The following changes in key assumptions, in isolation, would result in recoverable amount being close to equal to the
carrying amount of goodwill. Change in one of the key assumptions may impact the development of others, however, due to
Financials
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Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2022
the significant uncertainties and judgement in determining such dependency, this has not been done.
The sensitivities, which result in the recoverable amount being equal to the carrying value, are summarised below:
- an absolute increase of 0.51 percentage points in the discount rate, from 11.27% to 11.78%, or
- an absolute reduction of 0.69 percentage points in the perpetual growth rate, from growth of 2.93% to growth of 2.25%, or
- a reduction of 3.75% in the forecasted EBITDA.
Changes beyond those described may thus lead to a impairment situation.
An alternative way to assess the sensitivity of key assumptions is to assess the potential impairment need from a negative
development in the key assumptions.
The following changes in key assumptions, in isolation, would result in the carrying amount of goodwill exceeding the
recoverable amounts, which will lead to an impairment need. These sensitivities are summarised below:
- an absolute increase of 2 percentage points in the discount rate, from 11.27% to 13.27% would lead to an impairment need of
approx. NOK 170 million
- an absolute reduction of 2 percentage points in the perpetual growth rate, from growth of 2.93% to growth of 0.93% would
lead to an impairment need of approx. NOK 110 million
- a reduction of 10% in the forecasted EBITDA would lead to an impairment need of approx. NOK 119 million.
Note 12 - Intangible assets
(NOK 1,000)
Software
Customer
contracts Patents
Re-aquired
rights Total
Acquisition cost January 1, 2021 163 846 63 221 238 5 354 232 659
of which internally generated 93 220
- - -
93 220
Additions (internally generated) 39 042 - - - 39 042
Additions 9 265 1 952 - 11 217
Aquisitions 2 862 3 785 6 647
Disposals - -5 744 -5 744
Government grants -4 750 - - - -4 750
Acquisition cost December 31, 2021 210 265 63 214 238 5 354 279 071
of which internally generated 127 512
- -
127 512
Additions (internally generated) 37 068 - - - 37 068
Additions 82 629 - - - 82 629
Disposals - - -
Government grants -4 750 - - - -4 750
Acquisition cost December 31, 2022 325 212 63 214 238 5 354 394 018
of which internally generated
159 830 - - -
159 830
Accumulated amortisation and
impairment losses January 1, 2021 79 101 14 257 238 5 354 98 950
of which internally generated 42 946
- - -
42 946
Amortisation of internally generated assets 9 649 - - - 9 649
Amortisation of other assets 18 778 10 821 - - 29 599
Impairment 1 952 1 952
Accumulated amortisation and
impairment losses December 31, 2021 107 528 27 030 238 5 354 140 151
of which internally generated 52 595 52 595
Financials
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Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2022
Amortisation of internally generated assets 35 732 - - - 35 732
Amortisation of other assets 23 582 15 947 - 39 529
Impairment -377 -377
Accumulated amortisation and
impairment losses December 31, 2022 166 842 42 600 238 5 354 215 034
of which internally generated 88 327
- - -
88 327
Carrying value as at January 1, 2021 84 745 48 964 - 0 133 709
of which internally generated 50 274
- - -
50 274
Carrying value as at December 31, 2021 102 737 36 184 - 0 138 920
of which internally generated 74 917
- - -
74 917
Carrying value as at December 31, 2022 157 993 20 614 - 0 178 606
of which internally generated 71 503
- - -
71 503
Estimated useful life and amortisation plan is as follows:
Useful life 5 years 5 years 5 years 1 year
Amortisation plan straight-line straight-line straight-line straight-line
The development expenditures that do not meet the criteria for capitalisation are recognised as salary and personnel
expenses and other operating expenses in profit and loss. The aggregate amount for 2022 is NOK 165,43 million
(2021: NOK 158,96 million).
The Group has received government grants related to development of software of NOK 4,75 million in 2021 and NOK 4,75
million in 2022. The grants have been subtracted from the carrying amount of internally generated software.
Financials
Note 13 - Trade and other receivables
(NOK 1,000)
12/31/2022 12/31/2021
Trade receivables 195 764 216 337
Provisions for bad debt -5 413 -4 684
Public taxes and funds 7 353 4 839
Other current receivables 1 022 1 383
Total current trade and other receivables 198 727 217 875
Deposits 1 680 6 859
Total non-current trade and other receivables 1 680 6 859
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Aging of trade receivables 12/31/2022 12/31/2021
Current 131 610 170 381
1-30 days past due 28 793 21 181
31-60 days past due 11 169 7 109
61-90 days past due 9 477 5 455
More than 90 days past due 14 716 12 212
Less provision for bad debt -5 413 -4 684
Total 190 351 211 653
Movements in the provision for impairment of trade receivables 2022 2021
Opening balance provision for bad debt as at January 1 4 684 4 357
Change in provision for the year 6 083 1 828
Receivables written off during the year -5 479 -1 282
Translation differences 125 -218
Closing balance provision for bad debt as at December 31 5 413 4 684
Note 14 - Other current assets
(NOK 1,000)
Note 15 - Cash and cash equivalents
(NOK 1,000)
31/12/2022 31/12/2021
Other prepayments 23 326 27 913
Other current assets - -
Total 23 326 27 913
31/12/2022 31/12/2021
Bank deposits 419 306 803 852
Total cash and cash equivalents 419 306 803 852
Restricted cash
These deposits are subject to regulatory restrictions and are therefore not available for general use.
31/12/2022 31/12/2021
Taxes withheld 9 119 6 996
Total restricted cash 9 119 6 996
Of the total cash and cash equivalents as of December 31, 2022 NOK 6 853 is held as a bank guarantee at DNB bank for
the lease contract with Mustad Eiendom AS regarding rental of offices in Lysaker.
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Note 16 - Share capital, shareholder information and dividend
The Parent Company’s registered share capital as at December 31, 2022 was NOK 1,566,445 divided into 104,429,671
ordinary shares with a par value of NOK 0.015. All issued shares have equal voting rights. The parent company holds
treasury shares of 3,032,968 making the presented share capital NOK 1,520,950.
The Parent Company’s registered share capital as at December 31, 2021 was NOK 1,566,445 divided into 104,429,671
ordinary shares with a par value of NOK 0.015. All issued shares have equal voting rights. The parent company holds
treasury shares of 719,228 making the presented share capital NOK 1,556,255.
Development in the number of issued and outstanding shares
Number of shares
(1,000)
Share capital
(1,000)
Outstanding at January 1, 2022 104 429 1 566
Outstanding at December 31, 2022 104 429 1 566
Treasury shares
Number of shares
Outstanding at January 1, 2022 -719
Shares bought back on-market -2 370
Employee share scheme issue 56
Outstanding at December 31, 2022 -3 033
In February and March 2022 (initiated on February 11) the company performed a share buyback of NOK 87,7 million in
accordance with the share buyback program. The buyback program has been completed on March 10, 2022. The shares
acquired in this buyback program are expected to be used to fulfil the company’s obligations in future share option
excersises. Number of shares bought back from the market was 2 369 788.
Ownership structure
The 20 largest shareholders as of December 31, 2022:
Shares Ownership
T.D. VEEN AS 6 146 946 5.89%
HOLMEN SPESIALFOND 5 009 796 4.80%
BJØBERG EIENDOM AS 4 025 775 3.86%
PEXIP HOLDING ASA 3 032 968 2.90%
Avanza Bank AB 2 829 785 2.71%
J.P. Morgan SE 2 498 677 2.39%
VEEN EIENDOM AS 2 133 496 2.04%
SYNESI AS 2 100 000 2.01%
STAVANGER VENTURE AS 2 061 063 1.97%
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A HOLDINGS AS 2 010 000 1.92%
The Bank of New York Mellon SA/NV 1 921 547 1.84%
XFILE AS 1 850 000 1.77%
CARABACEL AS 1 563 064 1.50%
CHAMBERLIN 1 516 101 1.45%
LIA INVESTMENTS LIMITED 1 451 252 1.39%
SIRIUS AS 1 300 000 1.24%
PROJECT X INVESTCO AS 1 296 262 1.24%
Skandinaviska Enskilda Banken AB 1 292 691 1.24%
PEBRIGA AS 1 207 730 1.16%
Tamorer ltd ATF Wylie Family Trust 1 118 748 1.07%
Total top 20 shareholders 46 365 901 44.40%
Others 58 063 770 55.60%
Total 104 429 671 100%
Number of shares owned directly or indirectly by the Management Group and Board of Directors at December 31, 2022:
Shares Ownership
Kjell Skappel (Vice-Chairman) 10 341 505 9.90%
Per Haug Kogstad (Board Member) 4 059 775 3.89%
Michel Sagen (Chairman) 1 563 064 1.50%
Irene Kristiansen (Board Member) 150 000 0.14%
Marianne Wergeland Jenssen (Board Member) 3 000 0.00%
Phillip Austern (Board member) 100 000 0.10%
Ian Mortimer (CTO) 54 667 0.05%
Patricia Auseth (CMO) 10 068 0.01%
Åsmund Fodstad (CRO) 776 275 0.74%
Ingrid Woodhouse (CPO) 39 080 0.04%
Øystein Hem (CFO) 130 968 0.13%
Trond Johannessen (CEO) 75 000 0.07%
Total 17 303 402 16.57%
Dividend paid and proposed
Proposed for approval at AGM for financial year 2022 is that no dividend will be paid. No dividend was paid
for financial year 2021.
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Note 17 - Borrowings
(NOK 1,000)
The Group’s interest-bearing liabilities consists of:
Interest rate Year of maturity 12/31/2022 12/31/2021
Loan from Innovasjon Norge 3.70% 2024 - 4 000
Other borrowings 16
Total long-term debt 16 4 000
Loan from Innovasjon Norge 3.70% 2023 4 000 2 000
Other borrowings 77
Total short-term debt 4 077 2 000
The leasing liabilities are presented separately in note 10 - Leases.
The fair value of external borrowings does not materially differ from the carrying amount since interest payable is close to
current market rates.
Pledged as security
The Group’s loans to Innovasjon Norge are secured borrowings. The carrying amount of assets pledged as collateral are as
follows:
12/31/2022 12/31/2021
Property, plant and equipment 29 039 36 033
Trade receivables 190 351 211 653
Total 219 390 247 686
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Note 18 - Contract costs, contract assets and contract liabilities
(NOK 1,000)
Contract assets 2022 2021
Balance at January 1 17 431 9 069
Additions 37 252 17 431
Reclassifications to accounts recievables -17 450 -9 069
Balance at December 31 37 233 17 431
Contract assets are presented as other current assets. Refer to note 14.
Contract liabilities 2022 2021
Balance at January 1 202 302 155 180
New contract liabilities 203 747 187 489
Revenue recognised from liability opening balance -175 045 -140 366
Balance at December 31 231 004 202 302
For impairment of contract assets the simplified approach is used and the expected loss provision is measured at the
estimate of the lifetime expected credit losses. The provision matrix is disclosed in note 21 - Financial risk. In accordance
with the provision matrix no loss allowance or impairment is recognised for contract assets in 2022 or 2021.
Contract costs 2022 2021
Balance at January 1 262 076 211 077
Additions 93 286 101 630
Depreciated during the year -69 583 -50 630
Balance at December 31 285 779 262 076
Contract assets and liabilities
Of the contract liabilities as of December 31, 2022, NOK million 175 has been recognised as revenue in 2022 (2021: NOK
million 140.4) corresponding to 87% (2021: 90%) of the contract liability the preceding year end. The increase of the
contract liability in 2021 and 2022 is mainly due to increase in sales.
Of the contract assets as of December 31, 2022, NOK million 17.45 is reclassified to accounts receivables in 2022 (2021:
NOK million 9.1). The increase in contract asset to NOK million 37.2 in 2022 (2021: NOK million 17.4) is mainly due to
increase in sales.
The definition of contract assets and contract liabilities, together with a description of the relevant accounting principles
can be found under the headline Contract balances in the description of the group’s accounting principles (section 2.3.5).
Contract costs
The definition of contract costs, together with a description of the relevant accounting principles can be found under the
headline Costs of obtaining or fulfilling contracts with customers in the description of the group’s accounting principles
(section 2.3.5).
In 2022, amortization of contract costs amounting to NOK million 67.6 was recognised as part of salary and personnel
expenses and NOK million 2 as cost of sale. For 2021 the amounts were NOK million 48.8 and NOK million 1.9 respectively.
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Note 19 - Categories of financial assets and financial liabilities
(NOK 1,000)
Note 20 - Reconciliation for liabilities arising from financing activities
(NOK 1,000)
Financial assets 12/31/2022 12/31/2021
Financial assets at amortised cost:
Cash & cash equivalents (note 15) 419 306 803 852
Trade and other receivables (note 13) 198 727 217 875
Total 618 033 1 021 727
Financial liabilities 12/31/2022 12/31/2021
Liabilities at amortised cost:
Borrowings (note 17) 4 093 6 000
Trade and other payables 119 665 111 808
Lease liabilities (note 10) 83 999 113 527
Total 207 757 231 335
Non-financial assets and liabilities are excluded from the table.
The table below details changes in the Group’s liabilities arising from financing activities, including both cash and non-
cash changes. Liabilities arising from financing activities are those for which cash flows were, or future cash flows will be,
classified in the Group’s consolidated cash flow statement as cash flows from financing activities.
For the year ended December 31, 2022 1/1/2022 Net cash flows New liabilities 12/31/2022
Borrowings (note 17) 6 000 -1 907 4 093
Lease liabilities (note 10) 113 527 -27 399 -2 129 83 999
Total liabilities from financing activities 119 527 -29 306 -2 129 88 092
Proceeds from issuance of ordinary shares of NOK 0 million is recognised in equity.
For the year ended December 31, 2021 1/1/2021 Net cash flows New liabilities 12/31/2021
Borrowings (note 17) 8 500 -2 500 6 000
Lease liabilities (note 10) 92 349 -13 688 34 866 113 527
Total liabilities from financing activities 100 849 -16 188 34 866 119 527
Proceeds from issuance of ordinary shares of NOK 94,5 million is recognised in equity.
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Note 21 - Financial risk
(NOK 1,000)
The most significant financial risks which affect the group are credit risk, liquidity risk and market risk related to foreign
exchange rate risk, described further below. Management performs continuous evaluations of these risks and related
processes established to manage them within the group.
Credit risk
The group is exposed to credit risk from its operating activities, primarily trade receivables. The group does not have a
specific procedure for assessing credit risks for its customers before transactions are entered, and mainly does business
with large channel partner organizations. The group does not have significant credit risk associated with a single
counterparty.
Most customer contracts are with channel partners, of which Pexip has multiple engagements. Such contracts are mainly
invoiced yearly or monthly in advance with standard payment terms of 30 days. The group has a collection policy to ensure
overdue invoices are taken action.
The group applies the IFRS 9 simplified approach to measuring expected credit losses, using a lifetime expected loss
allowance for all trade receivables. Trade receivables have been grouped based on shared credit risk characteristics and the
days past to measure the expected credit losses. The historical loss rate has been adjusted to reflect current and forward-
looking information on macroeconomic factors affecting the ability of the customers to settle the receivables. The amount
of expected credit loss is updated at each reporting date to reflect changes in credit risk since the initial recognition of the
respective financial instrument.
The following table provides information about the exposure to credit risk and expected credit losses for trade receivables
and contract assets as of December 31 in 2022 and 2021:
The Group has historically had little receivables loss and has not seen any more significant effect from the covid-19 virus.
However, the Group has considered the uncertainty in the market and the time value of money from later payments.
For the year ended December 31, 2022
Trade receivables and contract assets Current
1-30 days
past due
31-60 days
past due
61-90 days
past due
More than 90
days past due
Loss rate 1,35% 1,80% 2,25% 3,00% 8,74%
For the year ended December 31, 2021
Trade receivables and contract assets Current
1-30 days
past due
31-60 days
past due
61-90 days
past due
More than 90
days past due
Loss rate 1,35% 1,80% 2,25% 3,00% 8,74%
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In addition to using the simplified approach, the Group has made an individual assessment of trade receivables above a
particular value and adjusted the provision with specific allowances for doubtful accounts. The Group writes off a trade
receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic
prospect of recovery, e.g., when the debtor has been placed under liquidation or has entered bankruptcy proceedings, or
when the trade receivables are over two years past due, whichever occurs earlier. None of the trade receivables that have
been written off is subject to enforcement activities.
Cash and cash equivalents: The counterparts for the group’s cash deposits are large banks considered to be solid. The group
assesses no material credit risks associated with these deposits.
Liquidity risk
The group monitors liquidity centrally across the group. It is the group’s strategy to have sufficient cash and cash
equivalents to at any time fund operations and investments according to the company’s strategic plans. The group monitors
its liquidity risk through a short-term and a long-term liquidity forecast to manage the target of a minimum position of cash
imposed by the Board of Directors.
The group’s financial liabilities are mainly traded payables. In addition, the group has a long-term loan to Innovation Norway
and multi-year leases on offices and IT equipment.
Maturities of financial liabilities
The tables below analyse the Group’s financial liabilities into relevant maturity groupings based on their contractual
maturities. The amounts disclosed in the table are the contractual undiscounted cash flows. The maturity profile of the
Group’s leasing liabilities can be found in note 10.
For the year ended December 31, 2022
Current Non-current
(NOK 1,000) 1-6 months 6-12 months 1-2 years 2-5 years Later than 5 years
Borrowings 1 074 1 055 2 050 - -
Trade and other payables 119 665 - - - -
Total liabilities 120 740 1 055 2 050 - -
For the year ended December 31, 2021
Current Non-current
(NOK 1,000) 1-6 months 6-12 months 1-2 years 2-5 years Later than 5 years
Borrowings 1 114 1 094 2 129 2 050 -
Trade and other payables 111 808 - - - -
Total liabilities 112 921 1 094 2 129 2 050 -
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The carrying NOK amounts of the Group’s financial assets and liabilities at the reporting date are as follows
(in 1,000 NOK):
Financial assets 2022 % of total 2021 % of total
NOK 255 239 41,3 % 348 513 34,1 %
USD 233 553 37,8 % 451 233 44,2 %
GBP 60 474 9,8 % 169 391 16,6 %
Other currencies 68 766 11,1 % 52 657 5,2 %
Total 618 033 100% 1 021 727 100%
Financial liabilities 2022 % of total 2021 % of total
NOK 124 064 59,7 % 131 866 57,0 %
USD 19 140 9,2 % 27 426 11,9 %
GBP 27 228 13,1 % 29 854 12,9 %
Other currencies 37 326 18,0 % 42 241 18,3 %
Total 207 757 100% 231 335 100%
Sensitivity analysis
Based on the net exposure of the Group, the hypothetical impact of exchange rate fluctuations on the profit before tax for
the year is as follows if all other variables are held constant:
2022 2022 2021 2021
Foreign
currency
Change in
rate
Effect on profit
before tax
(in 1,000 NOK)
Effect on Equity
(in 1,000 NOK)
Effect on profit
before tax
(in 1,000 NOK)
Effect on Equity
(in 1,000 NOK)
USD +/- 7% 15 009 13 100 29 666 25 894
GBP +/- 7% 2 327 2 031 9 768 8 525
Note 22 - Capital management
(NOK 1,000)
The Group’s objectives for capital management are to ensure that it maintains sufficient free liquidity with regards to cash
and cash equivalents to support its business and obligations and have enough flexibility to invest in attractive investment
opportunities. The group manages its capital structure, considering changes in economic and actual conditions and the
development of its underlying business.
We have established an international cash pool for the Pexip Group to improve the capital management.
Market risk
Foreign exchange rates
The group operates globally and is exposed to foreign exchange risk regarding trade receivables, payables, and cash and
cash equivalent holdings. Foreign exchange risk arises from future commercial transactions and recognised assets and
liabilities denominated in a currency that is not the functional currency of the group and the value of cash holdings in other
currencies than the functional currency, which is NOK.
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Note 23 - Pensions and other long-term employee benefits
(NOK 1,000)
Note 24 - Share-based payments
(NOK 1,000)
The employees of the group are covered by different pension schemes that vary from country to country and between the
different companies in accordance with local law. All the plans are assessed to be defined contribution plans. The period’s
contributions are recognised in the income statement as salary and personnel costs.
The Norwegian company in the group is required to have an occupational pension scheme in accordance with the
Norwegian law on required occupational pension (“lov om obligatorisk tjenestepensjon”). The company’s pension
arrangements fulfil the requirements of the law.
The pension plans in the group require that the company pays premiums to public or private administrative pension plans
on a mandatory, contractual or voluntary basis. There are no further obligations once the annual premiums are paid.
The premiums are accounted for as salary and personnel expenses as soon as they are incurred. Prepaid premiums are
accounted for as an asset to the extent that future benefits can be determined as plausible.
2022 2021
Pension cost 45 639 13 431
Long-term employee benefits comprise loans to employees (refer to note 4) and share-based payments (refer to note 24).
Pexip has two share-based compensation programs offered to employees: stock options and restricted stock units (RSUs).
In 2022, Pexip provided an extraordinary grant to key employees and management, which vest on 31.12.2024. Vesting
criteria for grants to Management include certain performance criteria, whereas grants to key employees include no other
performance obligations than continued employment. Legacy stock option programs (granted prior to 2022) vest over a
period of four years and fully vest, at earliest, in 2023 and at latest during 2025. Options expire 5 years after grant date – at
earliest in 2024 and latest in 2026. Exercise windows for stock options are currently offered once, annually, to employees
and are typically conditional upon active employment at the time of exercise. Stock options programs directed towards
management have an exit event as a vesting condition and can be settled in either cash or equity. These options are,
however, treated as equity settled due to historical practice and future intentions of only settling in equity. Exercises related
to option programs for management are conditional upon active employment status at the time of exercise.
For RSUs granted in 2022, the share price at grant date is used as the basis for calculation of RSUs, and RSUs vest in the
third year after grant date.
Options 2022 2022 2021 2021
Weighted average
exercise price Number
Weighted average
exercise price Number
Outstanding at January 1 54,81 5 131 938 41,03 7 908 534
Granted during the year 17,28 3 940 000 84,20 942 000
Converted during the year N/A -2 012 725 N/A N/A
Forfeited during the year 38,32 -1 784 188 46,65 -621 000
Exercised during the year 14,50 -16 200 30,50 -3 097 596
Expired during the year 14,50 -5 875
Outstanding at December 31 26,14 5 252 950 54,62 5 131 938
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RSUs 2022 2022 2021 2021
Number Number
Outstanding at January 1 - 93 780 - -
Granted during the year - 973 725 - 98 310
Converted - 811 490
Forfeited during the year - -644 463 - -4 530
Exercised during the year - - -
Expired during the year - -
Outstanding at December 31 - 1 234 532 93 780
The exercise price of options outstanding at December 31, 2022 ranged beetween NOK 14.5 and NOK 100 (2021: NOK 14.5
and NOK 100) and their weighted average contractual life was 3.1 years (2021: 3.2 years). Weighted average contractual life
for RSUs outstanding at December 31, 2022 was 1.99 years (2021: 3.12 years).
Of the total number of options outstanding at December 31, 2022 1 131 175 (2021: 325 438) had vested and were
excercisable. No RSUs were vested at December 31, 2022.
The weighted average fair value of each option granted during the year was NOK 4.69 (2021: NOK 25.46). The weighted
average fair value of each RSU granted during the year was NOK 31.57 (2021: NOK 64.06).
The total expense recognised for the period arising from equity-settled share-based payment transactions was NOK 25.1
million (2021: NOK 30.4 million).
The following information is relevant in the determination of the fair value of instruments granted during the year.
Options 2022 2021
Option pricing model used Black-Scholes/
Monte Carlo
Black-
Scholes
Weighted average share price at grant date (in NOK) 16 83
Excercise price (in NOK) 17 84
Weighted average contractual life (in days) 1 675 1 827
Expected volatility 41.69% 36.01%
Risk-free interest rate 2.57% 0.76%
The expected volatility is based on the volatility for a selection of comparable listed peer companies.
As there are no expected dividend payments, the dividend parameter is not included in the calculations.
RSUs 2022 2021
Weighted average share price at grant date (in NOK) 37 64
Excercise price (in NOK) -
Weighted average contractual life (in days) 986 1 230
Expected volatility -
Risk-free interest rate -
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Note 25 - Government grants
(NOK 1,000)
Note 26 - List of subsidiaries
(NOK 1,000)
The Group is eligible for government grants of NOK 7.3 million in 2022 (2021: NOK 4.8 million). Of the total amount 4.8
million has been deducted from the carrying amount of other intangible assets (software), while the remaining amount of
NOK 2,5 million has been deducted from salary cost for the R&D department in Pexip Ltd.
In 2022 government grants relate to a SkatteFUNN project in Pexip AS, and an R&D project in Pexip Ltd. In the
SkatteFUNN project Pexip aims to develop the next generation video conferencing system, lifting the experience to new
levels for both users and administrators. This project aims to improve the usability compared to solutions on the market
today. The R&D project in Pexip Ltd relates to Infinity configuration management enhancement and Epic Healthcare
integration.
All conditions and contingencies attached to the grants have been fulfilled.
The consolidated financial statements for 2022 include the following subsidiaries:
Company Registered office Voting share Ownership share
Pexip AS Oslo, Norway 100% 100%
Pexip Ltd. Berkshire, England 100% 100%
Pexip Inc. Virginia, USA 100% 100%
Pexip Australia Pty Ltd Sydney, Australia 100% 100%
Pexip Singapore Pte Ltd Singapore, Singapore 100% 100%
Pexip Japan GK Tokyo, Japan 100% 100%
Videxio Asia Pacific Ltd. Kuala Lumpur, Malaysia 100% 100%
Pexip France SAS Neuilly-sur- Seine, France 100% 100%
Pexip Germany GmbH Düsseldorf, Germany 100% 100%
Pexip Netherlands B.V. Utrecht, Netherlands 100% 100%
Pexip Belgium NV Ghent, Belgium 100% 100%
The consolidated financial statements for 2021 include the following subsidiaries:
Company Registered office Voting share Ownership share
Pexip AS Oslo, Norway 100% 100%
Pexip Ltd. Berkshire, England 100% 100%
Pexip Inc. Virginia, USA 100% 100%
Pexip Australia Pty Ltd Sydney, Australia 100% 100%
Pexip Singapore Pte Ltd Singapore, Singapore 100% 100%
Pexip Japan GK Tokyo, Japan 100% 100%
Videxio Asia Pacific Ltd. Kuala Lumpur, Malaysia 100% 100%
Pexip France SAS Neuilly-sur- Seine, France 100% 100%
Pexip Germany GmbH Düsseldorf, Germany 100% 100%
Pexip Netherlands B.V Utrecht, Netherlands 100% 100%
Skedify NV Ghent, Belgium 100% 100%
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Note 27 - Transactions with related parties
The Group’s related parties include Parent Company and subsidiaries, as well as members of the Board, Management Group
and their related parties. Related parties also include companies in which the individuals mentioned above have significant
influence.
The Group is not part in any agreements, deals, or other transactions in which the Parent company’s Board of Directors
or Management Group had a financial interest, except for transactions following from the employment relationship.
Remuneration to key personnel is disclosed in the remuneration report.
Transactions and balances between the parent company and its subsidiaries, and between the subsidiaries, have been
eliminated on consolidation, and are not disclosed in this note. The Group does not have other transactions with related
parties, except for remuneration for their role in the Group.
Note 28 - Events after the balance sheet date
No events that have significantly affected or may significantly affect the operations of the Group have occurred after
December 31, 2022.
Note 29 - Market situation
Impact of Russia’s Invasion of Ukraine
The development in Ukraine, and the impact on business in the region is still ongoing. The war in Ukraine has impacted
Pexip in several ways. Pexip has two remote employees based in the conflict area and several employees from the involved
countries in other offices. Pexip’s main concern has been to ensure their safety and offer support to them in the best way.
The financial effect from this was limited in 2022 due to a modest market presence in the region, with the main impact
being in accounts receivables with customers in Russia now under sanction as well as a negative impact on future revenues
in the region. In response to the attack on Ukraine, several extensive packages of sanctions towards Russia have been
launched. The imposed sanctions are far-reaching. Norway has adhered to all EU sanctions and has transposition sanctions
into Norwegian law. To ensure compliance with the abovementioned measures, Pexip continuously maps our exposures to
Russia, Donetsk and Luhansk and Belarus. This includes, for example, systematic identification and assessment of current
relationships with banks, Resellers and Customers based in Russia or wholly or partly owned by Russian interest. All such
relations are thoroughly considered to ensure compliance with sanctions.
Impact from the market situation
The global economic situation has faced increasing challenges during 2022, with slowing growth and higher inflation is
Pexip’s key markets. This impacts Pexip customers, as several large enterprise companies have announced cost reduction
programs. This has also had a negative impact on the financial markets with an increasing cost of capital. Pexip has taken
action through its cost reduction program to reduce its cost base, which has contributed to mitigate cost increases on key
cost categories such as employee benefit expenses and cost of cloud computing. Pexip targets a positive free cash flow in
2023 and has very limited interest-bearing debt and a strong balance sheet. As such, the company is less exposed to the
increasing cost of capital.
Note 30 - Business combinations
Acquisition of Kinly Video Saas Business
On the 8th of February 2022, Pexip acquired the portfolio of Kinly-operated video services. The acquisition included 10
people, as well as all relevant documents, processes and codes related to the acquired products. At the same time, an
agreement of continued sale to existing customers through Kinly was concluded.
According to IFRS 3, this transaction constitutes a business combination and Pexip has assessed the fair values of the
acquired assets and liabilities accordingly.
This requires recognising the assets acquired and liabilities assumed at fair value as of the acquisition date. Consideration
is the sum of the fair values, as of the date of exchange, of the assets given, liabilities incurred or assumed, and equity
instruments issued in exchange for control of the acquiree.
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The acquiree’s identifiable assets, liabilities and contingent liabilities are recognized separately at the acquisition date
at their fair value irrespective of any non-controlling interest, and goodwill is recognized to the extent the consideration
exceeds identified net assets.
In a business combination, consideration, assets, and liabilities are recognized at estimated fair value, and any excess
purchase price is included in goodwill. Estimating fair values requires using valuation models for acquired assets and
liabilities. Such evaluations are subject to numerous assumptions and are thus uncertain.
The fair value of the consideration paid calculates to NOK 66 million, solely in cash payments. NOK 10 million of these were
contingent considerations, as was not paid out at closing date. The total cashflow related to this purchase in 2022 was NOK
56 million. These are presented under the line item ‘Payment for acquisition of subsidiary, net of cash acquired’ in the cash
flow statement. Pexip has performed a purchase price analysis and allocated the value solely to the technology acquisition.
The acquired technology is activated on the balance sheet and depreciated over a period of three years.
No goodwill is recognized from the transaction.
Note 31 - Restructuring costs
The restructuring costs from the reorganization undertaken in 2022 is recognized through profit and loss on line
item other gains and losses. The cost recognized mainly relates to remaining salary obligations after release date for
terminated employees and legal costs directly related to restructuring activities. Total restructuring costs amounted to
NOK 61,3 million.
2022 2021
Salary obligations 59 838
Legal costs 1 452
Total 61 290
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Profit and Loss Statement
(NOK 1,000)
NOTE OPERATING REVENUE AND OPERATING EXPENSES 2022 2021
2 Depreciation, amortisation and impairment losses 404 000 0
3, 4 Other operating expenses 20 314 22 544
Total operating expenses 424 314 22 544
Operating loss -424 314 -22 544
FINANCIAL INCOME AND FINANCIAL EXPENSES
5 Other financial income 49 673 9 671
5 Other financial expenses -2 600 -176
Financial items, net 47 074 9 495
Profit/Loss before taxation -377 240 -13 049
6 Income tax 5 887 -2 871
PROFIT/LOSS FOR THE FINANCIAL YEAR -383 126 -10 178
ALLOCATION OF NET LOSS AND EQUITY TRANSFERS
7 Transferred to / from other equity -383 126 -10 178
Total allocations and equity transfers -383 126 -10 178
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Balance Sheet at December 31
(NOK 1,000)
NOTE ASSETS 31/12/2022 31/12/2021
Non-current assets
Financial non-current assets
6 Deferred tax 35 908 41 795
2 Investments in group companies 1 059 223 1 086 303
8 Receivables from Group company 250 533 245 765
Total financial non-current assets 1 345 664 1 373 864
Total non-current assets 1 345 664 1 373 864
Current assets
Receivables
Other current assets 1 055 1 147
8 Receivables from Group company 20 428 6 343
Total receivables 21 483 7 490
Cash and cash equivalents 399 074 635 053
Total current assets 420 558 642 543
TOTAL ASSETS 1 766 221 2 016 407
(NOK 1,000)
NOTE SHAREHOLDERS EQUITY AND LIABILITIES 31/12/2022 31/12/2021
Shareholders equity
Paid-in equity
7,9 Share capital 1 521 1 556
7, 10 Share premium 2 115 938 2 115 938
Total paid-in equity 2 117 460 2 117 495
Equity
7 Other equity -558 203 -114 592
Equity -558 203 -114 592
Total shareholders equity 1 559 256 2 002 903
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Liabilities
Current liabilities
Trade and other payables 417 973
8 Debt to group Company 206 548 12 532
Total current liabilities 206 965 13 505
Total liabilities 206 965 13 505
TOTAL SHAREHOLDERS EQUITY AND LIABILITIES 1 766 221 2 016 407
Oslo, March 28, 2023
Board of Directors and CEO of Pexip Holding ASA
Michel Sagen
Chair of the Board
Per Haug Kogstad
Board Member
Irene Kristiansen
Board Member
Phillip Austern
Board Member
Kjell Skappel
Vice-Chair of the Board
Asta Ellingsen Stenhagen
Board Member
Marianne Wergeland Jenssen
Board Member
Trond K. Johannessen
CEO
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Cash Flow Statement
(NOK 1,000)
2022 2021
CASH FLOW FROM OPERATIONS:
Profit/(loss) before taxation -377 240 -13 049
Taxes paid for the period 0 0
Depreciation and amortisation 0 0
Impairment of investment in Pexip AS 404 000 0
Pension expenses without cash effect 0 0
Effect of currency rate changes -25 734 -6 350
Gain/(loss) on sale of fixed assets and intangibles 0 0
Financial income/(expenes) - net -4 383 -286
Items classified as investment or financing activities 0 0
Interest received 4 742 461
Change in trade receivables 0 0
Change in trade payables -675 -266
Changes in inter-company balances 179 931 3 050
Changes in other current assets and other liabilities 92 -150
Net cash flow from operations 180 733 -16 589
CASH FLOW FROM INVESTMENT ACTIVITIES:
Outflows due to investments in daughter company -354 413 -245 765
Net cash flow from investment activities -354 413 -245 765
CASH FLOW FROM FINANCING ACTIVITIES:
Inflow from share exercise 0 94 486
Inflow due to new current liabilities 0 0
Net change in equity 0 0
Equity repayment 0 0
Issuance of ordinary shares 0 0
Purchase of treasury shares -87 674 -87 996
Interest paid -359 0
Payments in due to group contribution 0 0
Payments out due to group contribution 0 0
Net cash flow from financing activities -88 033 6 490
Effects of currency rate changes on bank deposits, cash and equivalents 25 734 6 350
Net change in bank deposits, cash and equivalents -235 979 -249 514
Bank deposits, cash and equivalents at 1. january 2021 635 053 884 567
Bank deposits, cash and equivalents at 31 December 399 074 635 053
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Note 1 - Accounting policies
The financial statements have been prepared in accordance with the Norwegian Accounting Act of 1998 and generally
accepted accounting principles in Norway.
Valuation and classification of assets and liabilities
Assets intended for permanent ownership or use in the business are classified as non-current assets. Other assets are
classified as current assets. Receivables due within one year are classified as current assets. The classification of current
and non-current liabilities is based on the same criteria.
Current assets are valued at the lower of historical cost and fair value.
Fixed assets are carried at historical cost, but are written down to their recoverable amount if this is lower than the carrying
amount and the decline is expected to be permanent. Fixed assets with a limited economic life are depreciated on a
systematic basis in accordance with a reasonable depreciation schedule.
Other long-term liabilities, as well as short-term liabilities, are valued at nominal value.
Foreign currency
All balance sheet items denominated in foreign currencies are translated into NOK at the exchange rate prevailing
at the balance sheet date.
Shares in subsidiaries and associates
Subsidiaries and investments in associates are carried at cost. A write-down to fair value will be performed if the
impairment is not considered to be temporary, and an impairment charge is deemed necessary according to generally
accepted acccounting principles. Received dividends and group contributions are recognised as other financial income. The
same applies for investments in associates.
Share-based payments
Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model,
which depends on the terms and conditions of the grant. This estimate also requires determination of the most appropriate
inputs to the valuation model including the expected life of the share option or appreciation right, volatility and dividend yield
and making assumptions about them.
For the measurement of the fair value of the equity-settled transactions with employees at the grant date, the Group uses
the Black-Scholes-Merton option pricing model.
Revenue
Revenue is recognised when it is earned, i.e. when the claim to remuneration arises. This occurs when the service is
performed, as the work is being done. The revenue is recognised with the value of the remuneration at the time of
transaction.
Receivables
Trade receivables and other receivables are recognised at nominal value, less the accrual for expected losses of receivables.
The accrual for losses is based on an individual assessment of each receivable.
Cash and cash equivalents
Cash and cash equivalents include cash, bank deposits and other monetary instruments with a maturity of less
than three months at the date of purchase.
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Income taxes
Tax expenses are matched with operating income before tax. Tax related to equity transactions e.g. group contribution, is
recognised directly in equity.
Tax expense consists of current income tax expense and change in net deferred tax. Deferred tax liabilities and deferred tax
assets are presented net in the balance sheet.
Note 2 - Investments in subsidiaries and associated companies
(NOK 1,000)
Company Date of acquisition Registered office Voting share Ownership share
Pexip AS 10/22/2018 Lysaker, Norway 100% 100%
Equity latest
financial statements
Profit/loss latest
financial statements Company
Pexip AS 247 057 -389 756
Investment in daughter company Pexip AS is written down with NOK 404 million in 2022 as a result of the valuation
performed for the companies of the Pexip Group. In December 2022 there was a capital increase in Pexip AS performed by
conversion of receivables.
The capital increase amounted to NOK 350 million.
Note 3 - Payroll costs, number of employees, benefits, loans to
employees etc
(NOK 1,000)
Average number of employees during the year 0
Pexip Holding ASA has no employees.
Chief Executive Officer is compensated from Pexip AS. The remuneration to CEO is disclosed in the managment
remuneration report for 2022.
Remuneration to board of directors in the parent company
The remuneration to board of directors is disclused in the management remuneration report for 2022.
Auditor
Remuneration to Deloitte AS and their associates is as follows:
2022 2021
Statutory audit 2 454 1 740
Other certification services 81 80
Total 2 535 1 820
Amounts are excl. of VAT
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Note 4 - Operating expenses
(NOK 1,000)
Note 6 - Income tax expense
(NOK 1,000)
Note 5 - Financial Income and expenses
(NOK 1,000)
Other operating expenses 2022 2021
Operating expenses 10 743 12 532
Audit fees 2 535 1 820
Other professional fees 2 085 4 248
Other operating costs 4 950 3 945
Total 20 314 22 544
2022 2021
Interest income 6 983 461
Exchange gains 25 734 6 338
Other financial income -1
Interest income from Group company 16 957 2 872
Financial income 49 673 9 671
Interest expense -2 600 -176
Exchange losses
Other financial expenses
Financial expenses -2 600 -176
Net financial income (expense) 47 074 9 495
Of the Exchange gains and losses as of 31 December 2022, NOK 25 732 are related to currency changes (AUD, DKK, EUR,
GBP, SEK, SGD, USD) for the bank accounts.
Specification of income tax expense: 2022 2021
Current income tax payable
Changes in deferred tax 5 887 -2 871
Tax on profit/(loss) 5 887 -2 871
Allocation of income tax expense between Norway 2022 2021
Tax on profit/(loss) 5 887 -2 871
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Reconciliation from nominal to real income tax rate: 2022 2021
Profit/(loss) before taxation -377 240 -13 049
Estimated income tax according to nominal tax rate (22%) -82 993 -2 871
Tax effect of non deductible expenses 88 880
Income tax expense 5 887 -2 871
Effective income tax rate -2 % 22%
Due to impairment of investment in Pexip AS, the effective tax rate significantly differs from the nominal tax rate of the
company. This cost is treated as a non deductible expense.
2022
Asset
2021
Asset Specification for the tax effect of temporary differences and losses carried forward
Tax losses 35 908 41 795
Total 35 908 41 795
Deferred tax is determined based on the amount differences between the accounting principles and the taxation purposes,
of assets and liabilities at the reporting date. Deferred tax assets are generally recognised for all deductable temporary
differences to the extent that it is probable that they can be offset by future taxable income for the Pexip Group.
The company has assesed that the tax losses will be recoverable in the future.
Note 7 - Equity
(NOK 1,000)
Paid-in equity
Share
capital
Share
premium
Other
reserves
Retained
earnings
Total
Equity
Equity at January 1, 2022 1 556 2 115 938 -15 411 -99 181 2 002 902
Capital increase/share issue -
Profit/(loss) of the year -383 126 -383 126
Buy/sell treasury shares -35 -87 404 -87 439
Share based payments 26 920 26 920
Equity at December 31, 2022 1 521 2 115 938 -75 895 -482 307 1 559 256
Note 8 - Related party transactions and balances
(NOK 1,000)
Related party transactions, profit and loss
Related party balance items
Relationship to the
counterpart
Intercompany borrowings
2022
Intercompany borrowings
2021Counterpart
Pexip AS Subsidiary 206 548 12 532
Total 206 548 12 532
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Relationship to the
counterpart
Intercompany receivables
2022
Intercompany receivables
2021Counterpart
Pexip AS Subsidiary 270 961 252 108
Total 270 961 252 108
Intercompany borrowings amounted to NOK 206 548 of which NOK 193 412 is related to the established cash pool for the
Pexip Group.
Total cash amount within the cash pool for the Group per year end 2022 is booked in Pexip Holding ASA as the legal owner
of the cash.
Note 9 - Share capital and shareholder information
The Parent Company’s registered share capital as at December 31, 2022 was NOK 1,566,445 divided into 104,429,671
ordinary shares with a par value of NOK 0.015. All issued shares have equal voting rights. The parent company holds
treasury shares of 3,032,968 making the presented share capital NOK 1,520,950.
The Parent Company’s registered share capital as at December 31, 2021 was NOK 1,566,445 divided into 104,429,671
ordinary shares with a par value of NOK 0.015. All issued shares have equal voting rights. The parent company holds
treasury shares of 719,228 making the presented share capital NOK 1,556,255.
Development in the number of issued and outstanding shares
Number of shares
(1,000)
Share capital
(1,000)
Outstanding at January 1, 2022 104 429 1 566
Outstanding at December 31, 2022 104 429 1 566
Treasury shares
Number of shares
Outstanding at January 1, 2022 -719
Shares bought back on-market -2 370
Employee share scheme issue 56
Outstanding at December 31, 2022 -3 033
In February and March 2022 (initiated on February 11) the company performed a share buyback of NOK 87,7 million in
accordance with the share buyback program.
The buyback program has been completed on March 10, 2022.
The shares acquired in this buyback program are expected to be used to fulfil the companys obligations in future share
option excersises. Number of shares bought back from the market was 2 369 788.
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Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2022Financials
Ownership structure
The 20 largest shareholders as of December 31, 2022:
Shares Ownership
T.D. VEEN AS 6 146 946 5.89%
HOLMEN SPESIALFOND 5 009 796 4.80%
BJØBERG EIENDOM AS 4 025 775 3.86%
PEXIP HOLDING ASA 3 032 968 2.90%
Avanza Bank AB 2 829 785 2.71%
J.P. Morgan SE 2 498 677 2.39%
VEEN EIENDOM AS 2 133 496 2.04%
SYNESI AS 2 100 000 2.01%
STAVANGER VENTURE AS 2 061 063 1.97%
A HOLDINGS AS 2 010 000 1.92%
The Bank of New York Mellon SA/NV 1 921 547 1.84%
XFILE AS 1 850 000 1.77%
CARABACEL AS 1 563 064 1.50%
CHAMBERLIN 1 516 101 1.45%
LIA INVESTMENTS LIMITED 1 451 252 1.39%
SIRIUS AS 1 300 000 1.24%
PROJECT X INVESTCO AS 1 296 262 1.24%
Skandinaviska Enskilda Banken AB 1 292 691 1.24%
PEBRIGA AS 1 207 730 1.16%
Tamorer ltd ATF Wylie Family Trust 1 118 748 1.07%
Total top 20 shareholders 46 365 901 44.40%
Others 58 063 770 55.60%
Total 104 429 671 100 %
Number of shares owned directly or indirectly by the Management Group and Board of Directors at December 31, 2022:
Shares Ownership
Kjell Skappel (Vice-Chairman) 10 341 505 9.90%
Per Haug Kogstad (Board Member) 4 059 775 3.89%
Michel Sagen (Chairman) 1 563 064 1.50%
Irene Kristiansen (Board Member) 150 000 0.14%
Marianne Wergeland Jenssen (Board Member) 3 000 0.00%
Phillip Austern (Board Member) 100 000 0.10%
Ian Mortimer (CTO) 54 667 0.05%
Patricia Auseth (CMO) 10 068 0.01%
Åsmund Fodstad (CRO) 776 275 0.74%
Ingrid Woodhouse (CPO) 39 080 0.04%
Øystein Hem (CFO) 130 968 0.13%
Trond Johannessen (CEO) 75 000 0.07%
Total 17 303 402 16.57%
Dividend paid and proposed
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Proposed for approval at AGM for financial year 2022 is that no dividend will be paid. No dividend was
paid for financial year 2021.
Note 10- Share-based payments
(NOK 1,000)
Pexip has two share-based compensation programs offered to employees: stock options and restricted stock units
(RSUs). In 2022, Pexip provided an extraordinary grant to key employees and management, which vest on 31.12.2024.
Vesting criteria for grants to Management include certain performance criteria, whereas grants to key employees include
no other performance obligations than continued employment. Legacy stock option programs (granted prior to 2022) vest
over a period of four years and fully vest, at earliest, in 2023 and at latest during 2025. Options expire 5 years after grant
date – at earliest in 2024 and latest in 2026. Exercise windows for stock options are currently offered once, annually, to
employees and are typically conditional upon active employment at the time of exercise. Stock options programs directed
towards management have an exit event as a vesting condition and can be settled in either cash or equity. These options
are, however, treated as equity settled due to historical practice and future intentions of only settling in equity. Exercises
related to option programs for management are conditional upon active employment status at the time of exercise.
For RSUs granted in 2022, the share price at grant date is used as the basis for calculation of RSUs, and RSUs vest in the
third year after grant date.
Options 2022 2022 2021 2021
Weighted average
exercise price
Number Weighted average
exercise price
Number
Outstanding at January 1 54,81 5 131 938 41,03 7 908 534
Granted during the year 17,28 3 940 000 84,20 942 000
Converted during the year N/A -2 012 725 N/A N/A
Forfeited during the year 47,35 -1 784 188 46,65 -621 000
Exercised during the year 14,50 -16 200 30,50 -3 097 596
Expired during the year 14,50 -5 875 - -
Outstanding at December 31 26,14 5 252 950 54,62 5 131 938
RSUs 2022 2022 2021 2021
Number Number
Outstanding at January 1 - 93 780 - -
Granted during the year - 973 725 - 98 310
Converted - 811 490
Forfeited during the year - -644 463 - -4 530
Exercised during the year - - -
Expired during the year - -
Outstanding at December 31 1 234 532 93 780
The exercise price of options outstanding at December 31, 2022 ranged beetween NOK 14.5 and NOK 100 (2021:
NOK 14.5 and NOK 100) and their weighted average contractual life was 3.1 years (2021: 3.2 years). Weighted average
contractual life for RSUs outstanding at December 31, 2022 was 1,99 years (2021: 3.12 years).
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Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2022Financials
Of the total number of options outstanding at December 31, 2022 1,131,175 (2021: 325,438) had vested and were
excercisable. No RSUs were vested at December 31, 2022.
The weighted average fair value of each option granted during the year was NOK 4.69 (2021: NOK 25.46). The weighted
average fair value of each RSU granted during the year was NOK 31.57 (2021: NOK 64.06).
The total expense recognised for the period arising from equity-settled share-based payment transactions was NOK 25.1
million (2021: NOK 30.4 million).
The following information is relevant in the determination of the fair value of instruments granted during the year.
Options 2022 2021
Option pricing model used Black-Scholes/
Monte Carlo
Black-
Scholes
Weighted average share price at grant date (in NOK) 16 83
Excercise price (in NOK) 17 84
Weighted average contractual life (in days) 1 675 1 827
Expected volatility 41.69% 36.01%
Risk-free interest rate 2.57% 0.76%
The expected volatility is based on the volatility for a selection of comparable listed peer companies.
As there are no expected dividend payments, the dividend parameter is not included in the calculations.
RSUs 2022 2021
Weighted average share price at grant date (in NOK) 18 64
Excercise price (in NOK) -
Weighted average contractual life (in days) 986 1 230
Expected volatility -
Risk-free interest rate -
Note 11 - Events after the balance sheet date
No events that have significantly affected or may significantly affect the operations of Pexip Holding ASA have
occurred after 31 December 2022.
Note 12 - Market situation
The impact from the market situation is disclosed in the Annual report and note 29.
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Declaration in Accordance with 5-5 of the Securities Trading Act
We confirm that the financial statements for the period January 1 to December 31, 2022, have, to the best of
our knowledge, been prepared in accordance with applicable accounting standards and give a true and fair
view of the assets, liabilities, financial position and profit or loss of the company and the Group.
We also hereby declare that the annual report provides a true and fair view of the financial performance and
position of the company, as well as a description of the principal risks and uncertainties facing the company.
Oslo, March 28, 2023
Board of Directors and CEO of Pexip Holding ASA
Michel Sagen
Chair of the Board
Per Haug Kogstad
Board Member
Irene Kristiansen
Board Member
Phillip Austern
Board Member
Kjell Skappel
Vice-Chair of the Board
Asta Ellingsen Stenhagen
Board Member
Marianne Wergeland Jenssen
Board Member
Trond K. Johannessen
CEO
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(collectively, the “Deloitte organization”). DTTL (
also referred to as “Deloitte Global”) and each of its member firms and related entities are legally
separate and independent entities, which cannot obligate or bind each other in respect of third parties. DTTL and each DTTL m
ember firm and
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ach other. DTTL does not provide services to clients. Please see
www.deloitte.no to learn more.
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Norway
Tel:
+47 23 27 90 00
www.deloitte.no
To the General Meeting of Pexip Holding ASA
INDEPENDENT AUDITOR’S REPORT
Opinion
We have audited the financial statements of Pexip Holding ASA, which comprise:
• The financial statements of the parent company Pexip Holding ASA (the Company), which comprise the balance
sheet as at 31 December 2022, the income statement and cash flow statement for the year then ended, and
notes to the financial statements, including a summary of significant accounting policies, and
• The consolidated financial statements of Pexip Holding ASA and its subsidiaries (the Group), which comprise the
statement of financial position as at 31 December 2022, the statement of profit or loss, statement of
comprehensive income, statement of changes in equity and statement of cash flows for the year then ended,
and notes to the financial statements, including a summary of significant accounting policies.
In our opinion:
• the financial statements comply with applicable statutory requirements,
• the financial statements give a true and fair view of the financial position of the Company as at 31 December
2022, and its financial performance and its cash flows for the year then ended in accordance with the Norwegian
Accounting Act and accounting standards and practices generally accepted in Norway, and
• the consolidated financial statements give a true and fair view of the financial position of the Group as at 31
December 2022, and its financial performance and its cash flows for the year then ended in accordance with
International Financial Reporting Standards as adopted by the EU.
Our opinion is consistent with our additional report to the Audit Committee.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements
section of our report. We are independent of the Company and the Group as required by relevant laws and
regulations in Norway and the International Ethics Standards Board for Accountants’ International Code of Ethics for
Professional Accountants (including International Independence Standards) (IESBA Code), and we have fulfilled our
other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
To the best of our knowledge and belief, no prohibited non-audit services referred to in the Audit Regulation
(537/2014) Article 5.1 have been provided.
The company was listed in 2020. We have been the company’s elected auditor since before the company was listed.
We have been the company’s elected auditor continuously for 3 years since the company was listed, including the
listing year.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
financial statements of the current period. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters.
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page 2
Independent Auditor's Report -
Pexip Holding ASA
Carrying amount of goodwill
Key audit matter
How the matter was addressed in the audit
As disclosed in note 2.4 and 11, the Group has
recognized goodwill of NOK 662,645 thousand.
Goodwill is tested for impairment annually, or more
frequently if there is an indication of impairment.
To assess recoverability of goodwill, management must
make assumptions about future revenues, discount rates
as well as future operating costs.
Due to the inherent uncertainty involved in the
forecasting and discounting of future cash flows, and the
level of management judgment involved, this has been
identified as a key audit matter.
We evaluated relevant controls associated with
impairment testing.
We obtained the valuation model and challenged
management’s key assumptions used in the impairment
model. In particular;
• the growth rate in revenues;
• the future operating costs and margins; and
• the discount rate used.
We validated the mathematical accuracy of cash flow
models.
We used Deloitte valuation specialists in our audit of the
impairment assessment, including for review of
calculations and discount rate.
We also assessed the adequacy of the disclosures
provided by the Group in relation to the impairment
testing.
Other Information
The Board of Directors and the Managing Director (management) are responsible for the information in the Board of
Directors’ report and the other information accompanying the financial statements. The other information comprises
information in the annual report, but does not include the financial statements and our auditor’s report thereon. Our
opinion on the financial statements does not cover the information in the Board of Directors’ report nor the other
information accompanying the financial statements.
In connection with our audit of the financial statements, our responsibility is to read the Board of Directors’ report
and the other information accompanying the financial statements. The purpose is to consider if there is material
inconsistency between the Board of Directors’ report and the other information accompanying the financial
statements and the financial statements or our knowledge obtained in the audit, or whether the Board of Directors’
report and the other information accompanying the financial statements otherwise appear to be materially
misstated. We are required to report if there is a material misstatement in the Board of Directors’ report or the
other information accompanying the financial statements. We have nothing to report in this regard.
Based on our knowledge obtained in the audit, it is our opinion that the Board of Directors’ report
• is consistent with the financial statements and
• contains the information required by applicable statutory requirements.
Our opinion on the Board of Director’s report applies correspondingly to the statements on Corporate Governance
and Corporate Social Responsibility, and to the report on payments to governments.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation of financial statements that give a true and fair view in accordance
with the Norwegian Accounting Act and accounting standards and practices generally accepted in Norway, and for
the preparation and true and fair view of the consolidated financial statements of the Group in accordance with
International Financial Reporting Standards as adopted by the EU, and for such internal control as management
determines is necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
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page 3
Independent Auditor's Report -
Pexip Holding ASA
In preparing the financial statements, management is responsible for assessing the Company’s and the Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has
no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism
throughout the audit. We also:
• identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error.
We design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting
from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
• obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Company's and the Group's internal control.
• evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by management.
• conclude on the appropriateness of management’s use of the going concern basis of accounting, and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Company and the Group's ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures
in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s report. However, future events or
conditions may cause the Company and the Group to cease to continue as a going concern.
• evaluate the overall presentation, structure and content of the financial statements, including the disclosures,
and whether the financial statements represent the underlying transactions and events in a manner that
achieves a true and fair view.
• obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the consolidated financial statements. We are responsible
for the direction, supervision and performance of the group audit. We remain solely responsible for our audit
opinion.
We communicate with the Board of Directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify during
our audit.
We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably be
thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Board of Directors, we determine those matters that were of most
significance in the audit of the financial statements of the current period and are therefore the key audit matters.
We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the
matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our
report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
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page 4
Independent Auditor's Report -
Pexip Holding ASA
RReeppoorrtt oonn OOtthheerr LLeeggaall aanndd RReegguullaattoorryy RReeqquuiirreemmeennttss
Report on Compliance with Requirement on European Single Electronic Format (ESEF)
Opinion
As part of the audit of the financial statements of Pexip Holding ASA, we have performed an assurance engagement
to obtain reasonable assurance about whether the financial statements included in the annual report, with the file
name “PexipHoldingASA-2022-12-31-en.zip”, have been prepared, in all material respects, in compliance with the
requirements of the Commission Delegated Regulation (EU) 2019/815 on the European Single Electronic Format
(ESEF Regulation) and regulation pursuant to Section 5-5 of the Norwegian Securities Trading Act, which includes
requirements related to the preparation of the annual report in XHTML format, and iXBRL tagging of the
consolidated financial statements.
In our opinion, the financial statements, included in the annual report, have been prepared, in all material respects,
in compliance with the ESEF regulation.
Management’s Responsibilities
Management is responsible for the preparation of the annual report in compliance with the ESEF regulation. This
responsibility comprises an adequate process and such internal control as management determines is necessary.
Auditor’s Responsibilities
Our responsibility, based on audit evidence obtained, is to express an opinion on whether, in all material respects,
the financial statements included in the annual report have been prepared in compliance with ESEF. We conduct our
work in compliance with the International Standard for Assurance Engagements (ISAE) 3000 – “Assurance
engagements other than audits or reviews of historical financial information”. The standard requires us to plan and
perform procedures to obtain reasonable assurance about whether the financial statements included in the annual
report have been prepared in compliance with the ESEF Regulation.
As part of our work, we have performed procedures to obtain an understanding of the Company’s processes for
preparing the financial statements in compliance with the ESEF Regulation. We examine whether the financial
statements are presented in XHTML-format. We evaluate the completeness and accuracy of the iXBRL tagging of the
consolidated financial statements and assess management’s use of judgement. Our procedures include reconciliation
of the iXBRL tagged data with the audited financial statements in human-readable format. We believe that the
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Oslo, 28 March 2023
Deloitte AS
E
Eiivviinndd UUnnggeerrssnneessss
State Authorised Public Accountant
This document is electronically signed
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Appendix — Alternative Performance Measures (APMs)
The Group uses the following terms in the definition of APMs in this Report:
EBITDA: Profit/(loss) for the period before net financial items, income tax expense, depreciation, and
amortization.
Adjusted EBITDA: EBITDA adjusted for cost that are not related to the ordinary business and that are non-
recurring costs.
EBITDA-margin: EBITDA in the percentage of revenue.
Share of recurring revenues: Recurring revenue from own products is defined as revenue from time-limited
contracts where the purchase is recurring. Revenue from time-limited software subscriptions and related
mandatory maintenance contracts are considered recurring. Revenue from third-party software licences,
perpetual software licences and project-based professional services, such as customer-specific proof-of-
concept projects or installation projects, are considered non-recurring.
Contracted Annual Recurring Revenue (ARR): Annualized sales from all active subscriptions/contracts and
ordered subscriptions with a future start date where the subscription is time-limited and recurring in nature.
This corresponds to Pexip’s order backlog.
Gross Margin: Revenue after the cost of goods sold in the percentage of revenue.
Delta Annual Recurring Revenue (DARR): The difference in ARR from one quarter to another.
Net Revenue Retention (NRR) Rate is the percentage of annual recurring revenue retained from customers’
existing in the prior year, including upsell, downsell and total churn.
