Pexip Holding ASA

2023

Annual Report

2Highlights About Pexip Statement from the BoD Corporate Governance Financials Annual Report 2023

Table of

Contents

About Pexip

Highlights

Key figures

Letter from the CEO

Pexip as an investment

Board of Directors49

Statement from the

Board of Directors

Statement of Corporate

Governance (NUES)

Financials

Executive Management 48

2023 Highlights 12

Our journey11

The Pexip Way14

Customers and offering19

Market16

Strategy and targets23

Business model24

25 Sustainability

3Annual Report 2023About Pexip Statement from the BoD Corporate Governance FinancialsHighlights

Key figures

994 MNOK

Revenue 2023

304

Employees end of 2023

105 MNOK

Free cash flow 2023

90%

Gross Margin 2023

11%

EBITDA margin excl. other gains and losses 2023

113 MNOK

EBITDA adjusted 2023

103 MUSD

ARR end of 2023

About Pexip

The new hybrid way of working has led to growth in

video communication and collaboration. As more and

more organizations demand secure communication,

there is a need for private and compliant meeting

solutions. Pexip is an ideal solution provider in this

scenario as it offers seamless and secure communication

to organizations of all sizes, irrespective of their

technology platform or security requirements.

Pexip is a global video technology company that offers

flexible video technology to meet the demanding

requirements of government organizations and large

enterprises worldwide. Pexip was founded in Norway in

2011 with a vision to create a safer, greener, and more

connected world. With powerful technology partnerships

with Microsoft, Nvidia, Google, and HP/Poly, Pexip has

grown into a global company with over 300 employees

across Europe, North America, Asia, and Australia.

370

679

806

867

2019 2020 2021 2022 2023

Revenue (MNOK)

2022

2019 2020 2023

2023

2021

113

-124

EBITDA adjusted (MNOK)

-184

20222019 2020 2021

182

361

329

304

535

Employees

100

994

103

2019 2020 2021 2022 2023

106

Contracted Annual Recurring

Revenue (ARR, MUSD)

Definition of free cash flow: Cash flow from operating and investing

activities excluding acquisitions, including principal lease payments

Highlights About Pexip Statement from the BoD Corporate Governance Financials 4Annual Report 2023About Pexip Statement from the BoD Corporate Governance FinancialsHighlights

Global presence

304

employees across 25 countries

3,000+

customers enterprise and public sector

300+

partners

63 218 23

employees in the US employees in Europe employees in APAC

Washington DC

HQ Oslo

Stockholm

London

Madrid

Milan

Sydney

Tokyo

Singapore

Utrecht

Ghent

Paris

Technology partners

5Annual Report 2023Highlights About Pexip Statement from the BoD Corporate Governance FinancialsHighlights

Sharpening our focus and

returning to profitability

“Our focus for 2023 was to streamline our operations, work more strategically with

partners, and accelerate innovation. The result was a return to profitability and a company

set for accelerated growth ”

The stage is now set for growth.

In 2023, we united the global Pexip organization

behind a clear mission to make seamless video

communication available to all organizations

regardless of technology platforms and security

requirements. I am proud of the hard work,

dedication, and willingness of our team to

streamline operations and sharpen our focus on

areas where we can create the most value for our

partners and customers. This enabled us to improve

our performance and achieve profitable growth

during the year.

Our differentiated market position has helped

strengthen the relationship we have with our

technology alliances, the world’s leading meeting

providers. Pexip is seen as a video technology

provider that solves some of the industry’s most

persistent challenges, benefiting everyone. In 2023,

we co-developed innovative solutions that now

place Pexip as the world leader in meeting room

interoperability.

Our operational turnaround began in the second

half of 2022, at which time we began the work to

CEO LETTER

6Annual Report 2023Highlights About Pexip Statement from the BoD Corporate Governance FinancialsHighlights

uncover inefficiencies, reduce costs, and strengthen

our core business. This gave us a strong foundation

from which to build on in 2023, giving us more

room to focus on collaborating with key partners,

improving sales, innovating more on the product

side, and further streamlining of our structure and

way of work during the year.

Interoperability in demand

The demand for video system interoperability

remains steadfast in the industry, a trend in line

with the growing video endpoint market. Our

customers employ a variety of solutions and meeting

room systems across their organizations, and

interoperability serves as the bridge between

them all.

Pexip’s unique multiplatform capability enables

organizations to overcome technology barriers and

seamlessly collaborate using their meeting solutions

of choice. During the year, we focused on close

collaboration with the world’s leading technology

providers to bring interoperability to their solutions

– such as delivering a Teams-like experience in SIP-

based rooms/devices.

In 2023, we witnessed a growing market for

service-based endpoints like Teams and Zoom

Rooms. We saw this as an opportunity to innovate

our offering and develop direct dialing functionality

for these types of rooms. In doing so, Pexip

technology now enables these rooms to join

any meeting, no matter the video solution. This

approach has helped strengthen our position as

the global leader in video interoperability across all

endpoints and technology – connecting any room to

any meeting.

Compliance requirements drive the need

for secure communication.

With the rapid escalation in cyber threats around

the world, we see growing compliance requirements

across many organizations and nations. This has

boosted the demand for secure communication and

collaboration solutions that meet data sovereignty

and other data privacy and protection requirements.

The global private cloud market is expected to

grow 30 percent from 2023 to 2029, and Pexip’s

unique secure meeting technology is well-suited for

deployment in self-hosted environments, such as

private cloud or air-gapped.

In 2023, Pexip further innovated its secure and

custom meeting solution by enabling easier

integration and access for users. We launched our

Pexip Secure Meeting button for Outlook, which

makes it simple for users to select a more secure

meeting option directly from their email application

– ensuring greater compliance with current and

emerging regulations within the organization.

We also made significant strides in the

development of our Video Platform as a Service

(VPaaS), launching the beta version at the end of

2023. Pexip VPaaS provides the tools and APIs

needed to easily integrate video in any app or

service – and it’s specifically designed for regulated

industries that demand privacy and control of data.

Currently, select users are testing out this “on-

demand” cloud service, enabling these potential

customers to integrate a custom, secure, and

compliant video experience with minimal effort. We

aim for a full launch of Pexip VPaaS in 2024.

FedRAMP®-authorized in 2023.

The launch of Pexip Government Cloud was

another significant milestone for us in 2023. This is

a video conferencing SaaS designed for US federal,

state, and local government organizations. With

60 percent of federal employees now working in a

hybrid environment, Pexip’s FedRAMP®-authorized

solution for Microsoft Teams Cloud Video Interop

(CVI) enables civilian agencies in the US to

securely join Teams calls from their existing video

infrastructure, such as meeting equipment from

Cisco or HP/Poly. Agencies retain full ownership

over their call data, as Pexip Government Cloud

can be an extension of the agency’s on-premises

environment.

Innovation, AI, and Nvidia

AI was propelled into the mainstream in 2023,

and there’s no doubt that it promises to alter the

world of video conferencing as we know it. At

Pexip, we have a close partnership with Nvidia,

and now we are working with them to bring secure

AI-driven translation into video conferencing.

Together, we aim to deliver AI capabilities into

secure meetings – always ensuring that data

remains private, and under full control and

ownership of the client, as we innovate and take

advantage of all AI has to offer.

7Annual Report 2023Highlights About Pexip Statement from the BoD Corporate Governance FinancialsHighlights

Collaboration is at the core of who we are

At Pexip, we play an integral role in a large

ecosystem of players, and as such, collaboration

is critical to our future. In 2023, we announced a

strategic partnership with HP/Poly, bringing Pexip’s

technology into HP/Poly’s solutions for a seamless

video experience. We also continue to engage in a

strong collaboration with Microsoft as a certified

CVI partner. Together, we work closely to ensure a

superior Teams experience from any room or

any device.

Through our open and collaborative partnership

approach, we believe we are uniquely positioned

as the top video interoperability provider for all

endpoints and technologies, and we have built

a solid foundation for growth in the increasingly

important secure and customer meetings segment.

The power of our people

While Pexip’s video technology is second to none,

we know that we are nothing without our talented

people. They are our greatest asset, and together we

are a team driven by our core values.

In 2023, we created “success formula” to guide

our company into the future – in a way that truly

reflects who we are, who we want to be, and the

mission we are on. As part of this success formula,

we aim to “think like world champions”, fostering

grit and curiosity across Pexip. We draw inspiration

from the work we do with Team Aker Dæhlie,

taking a page out of their playbook by promoting

performance and equal opportunity to help everyone

at Pexip succeed. We believe that diversity and

inclusion among our workforce is essential to

innovate and to continue advancing our company.

The second element of our success formula asks

us to have “all eyes on the customer”. We strive to

identify the real challenges our customers face and

maintain the highest level of customer satisfaction.

To achieve this, we take all possible measures to

connect and engage with customers and develop

relevant solutions. It’s this type of thinking that

led us to develop our solution for enhancing Teams

Rooms capabilities with direct dialing from Pexip.

The third and final element of our success formula is

to “stay healthy”, which emphasizes the importance

of building a healthy business and culture. This

requires us to closely monitor our financial and

organizational health metrics, and to measure and

take steps to always ensure the well-being of

our people.

Going the extra mile

This past year was a good one for Pexip. We

overcame challenges and we uncovered new

possibilities. As a result of our willingness to

embrace new opportunities, sharpen our focus, and

streamline our organization, we were able to boost

sales, innovate more, and work even more closely

with our strategic partners. These achievements are

a testament to the quality of the Pexip team and the

strength of our culture. It’s because of our people

and their belief in Pexip that we are on track for

growth in 2024.

On behalf of the entire Pexip team, I would like to

express our gratitude to our partners, customers,

shareholders, and teammates. Our success and

bright future depend on an ecosystem of great

partners – from technology, to strategic to sales

– who work alongside us to drive innovation and

create more value for our customers. We are

thankful for your support and collaboration, and

we’re thrilled to be on this journey with you.

Trond K. Johannessen, CEO

Highlights About Pexip Statement from the BoD Corporate Governance Financials 8Annual Report 2023About Pexip Statement from the BoD Corporate Governance FinancialsHighlights

Pexip as an investment

Solid positioning for further growth

Pexip has a solid base of over USD 100 million in annual recurring revenues (ARR) and a clear path to profitable

operations. Moving forward, Pexip has set mid-term targets for its future performance, targeting double-digit

growth in revenue and above 20% EBITDA margin. Pexip is committed to deliver strong financial results to its

shareholders. In addition to its EBITDA target, Pexip aims to achieve a strong cash conversion rate and 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 strong company culture that values

performance and sets the customer first. The company has an open and inclusive work environment, where all

employees are given equal opportunities to succeed.

Strong position in growing niche markets

Pexip uses its unique technology in two niche markets, video interoperability and secure and custom

video meetings. Pexip has a strong position in both of these markets in terms of product differentiation, a

distinguished large enterprise and government customer list and strong industry partnerships with others in

the industry, such as Microsoft, Google and HP/Poly. Pexip has a clear focus on large organizations and has

focused its product development and its go-to-market to meet this segment’s needs. Pexip’s strategy is to

continue expanding its presence in these markets, leveraging its unique position to drive growth and increase

its market share.

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 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.

Highlights About Pexip Statement from the BoD Corporate Governance Financials 9

Annual Report 2023

Highlights

Statement from the BoD

Corporate Governance

Financials

About Pexip

Providing seamless video

communication available to all

organizations regardless of

technology platform and security

requirements.

OUR MISSION

10Annual Report 2023Highlights About Pexip Statement from the BoD Corporate Governance FinancialsHighlights Statement from the BoD Corporate Governance FinancialsAbout Pexip

and custom meeting solutions like Health, Defense,

Justice, and Government.

Pexip also offers a complementary secure meetings

solution to organizations that use public cloud-based

solutions as their default meetings platform and

require a more private, data-controlled solution for

classified or sensitive meetings. For this, Pexip offers

a simple Outlook plugin, enabling users to easily

swap between solutions that demand different levels

of privacy. Recently, Pexip also launched a video

platform-as-a-service for regulated industries that

demand geo-fenced solutions with no personally

identifiable information (PII) access.

Pexip has a strategic partnership in the ‘Secure and

Custom’ market with NVIDIA to facilitate private

AI solutions, such as AI-powered translation for

security-conscious organizations, as well as a

growing technology partnership with HP/Poly.

Pexip provides unique and innovative technology

to support customers on their journey toward

securely building more connected organizations.

Pexip works closely with technology partners and

a global ecosystem of business partners to provide

customers with valuable solutions.

Pexip is known for its strong people culture which

is built on values, attitudes, and mindsets that are

reflected in The Pexip Way, and which guide people

in their focus, behaviors, and how they deliver on

company ambitions.

Pexip powers everything from business communication

to ultra-secure government meetings, medical

appointments, and legal proceedings for many of the

world’s largest organizations.

As an interoperability provider, Pexip is a leader in

the Connected Spaces solutions area, enabling any

meeting room device (like Cisco Webex, HP/Poly, or

Microsoft Teams Rooms) to connect to any meeting

technology (like Meet, Teams, or Zoom).

The Pexip technology platform is developed with

server-side processing, also known as transcoding.

Transcoding is essential for compatibility and

efficient delivery of content across different platforms

and devices. This technology architecture offers a

unique value proposition by:

• Optimizing resource utilization and scalability

• Enhancing video quality, security,

and functionality

• Providing greater flexibility and cost-

effectiveness

The benefits of the platform have attracted

partnerships with top-tier technology companies like

Microsoft and Google, which has helped position Pexip

as a world leader in this market category.

Secondly, Pexip provides complete video meeting

solutions that can be self-hosted or placed in a private

cloud, catering to organizations that require secure

Pexip is a global video technology company founded in Norway in 2011. Our mission is to

provide seamless communication to all organizations regardless of technology platform and

security requirements.

11Annual Report 2023Highlights About Pexip Statement from the BoD Corporate Governance Financials

In a world where video is a fundamental part of

work, secure and seamless communication is

critical. We have spent a decade creating the world’s

most flexible and universal video technology. Making

it seamless is our priority. Making it private is our

default. And making it secure is by design. In doing

so, we give customers the ultimate level of control

over their data. This is our journey.

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, and 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 better way to interact. A

virtual court proceeding. A remote doctor-patient

consultation in an ambulance on the move. An

online mortgage consultation. An extended reality

utility maintenance inspection.

Video technology puts the human touch

back into our increasingly digital lives

We have always been at the forefront of 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, and 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

2023

Pexip partners with HP/Poly and

launches Video Platform-as-a-Service

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

Annual Report 2022 12

2023 Highlights

Highlights Statement from the BoD Corporate Governance FinancialsAbout Pexip

Pexip introduces a Teams-

like experience across video

meeting rooms.

With Pexip’s Teams-like experience, any

standards-based video conferencing system

that connects via Pexip Connect can now

use the familiar and intuitive look and feel of

Microsoft Teams.

Pexip strengthens and

extends its security

management

Pexip renewed the ISMS standard, ISO/

IEC 27001:2013, and the appendices to this

standard, ISO/IEC 27017:2015 and ISO/IEC

27018:2019. Pexip is granted certification for

ISO/IEC 27701:2019.

Pexip is awarded best

solution for digitizing justice

Pexip’s “Secure Meetings for Justice”

has received the “Best Global Video

Collaboration Solution for Judiciaries” award

at Frost & Sullivan’s 2023 Best Practice

Awards.

Pexip joins forces with

technology giant HP/Poly

Pexip and HP/Poly partner to offer Pexip’s

communications solutions to HP/Poly’s

privacy-conscious customers globally,

replacing HP/Poly’s infrastructure with

Pexip’s video technology.

Highlights About Pexip Statement from the BoD Corporate Governance Financials 13Annual Report 2022Highlights Statement from the BoD Corporate Governance FinancialsAbout Pexip

Pexip meets the gold security

and data protection standard

in the US

Pexip Connect for Government Cloud is now

authorized by FedRAMP® and StateRAMP,

allowing Pexip to provide secure and

compliant solutions to the US government

and public sector customers.

Pexip is setting a new

standard for secure AI

Pexip collaborates with Nvidia to provide

secure AI-powered live captioning, speech-

to-speech translation, and video quality

enhancements for security-conscious

customers.

Pexip powers new interop

capability for Microsoft

Teams Rooms

Pexip enables direct 1:1 calling from Teams

Rooms to all other room devices, enabling

the most basic use case for Teams Rooms

and SIP/H323: calling someone without

knowing the other party’s system.

Pexip launches

programmable video - a new

video platform.

Pexip announce the beta of VPaaS (Video

Platform as a Service), for highly regulated

industries such as Health, Finance, and

Government for compliance, customization,

privacy, and easy integration purposes.

14Annual Report 2023Highlights About Pexip Statement from the BoD Corporate Governance FinancialsAbout Pexip

The Pexip Way

Our company values are the foundation of everything we do. They guide our interactions

with each other, our customers, and our partners daily. These values steer our business

decisions, our product development, and our brand. As Pexip continues to grow and evolve,

following the Pexip Way is crucial to achieving success. From the very beginning, Pexip has

maintained an inclusive and transparent work culture that provides equal opportunities

to all. We take pride in representing a diverse workforce and believe that diversity is a

competitive advantage.

One Team

We work together across functions, roles,

geographies, and product lines. We are all on the

same team, working together and contributing

our talents towards the same goal. We are non-

hierarchical.

We understand that we are all human, and we all

make mistakes. We take care of each other and treat

each other as we would like to be treated. We offer

each other help and support where it’s needed.

We are a diverse team that are all highly skilled and

knowledgeable in our areas. We appreciate and

respect that we all have different backgrounds and

points of view.

Professional & Fun

We are highly committed to ensuring the success of

our partners and customers. They are the key to our

success.

We are professional without being boring. We have

and spread fun while behaving responsibly. We

believe in what we do and let that shine through

in our interactions with colleagues, partners, and

customers.

We really care for what we do and achieve – we stay

hungry!

Highlights About Pexip Statement from the BoD Corporate Governance Financials 15Annual Report 2023Highlights Statement from the BoD Corporate Governance Financials

Freedom & Responsibility

We hire great people and empower them with the

trust and autonomy to do what they do best. We

are free to use our initiative and make decisions

to work where, how, and when we want because

we take responsibility for doing what is right.

We understand our common goals and need for

innovation.

We are all leaders and take ownership of staying

excited, remaining distinctive in our area/function,

and doing what is holistically right. We are brave

and take the initiative to find a solution rather than

complaining.

We act like owners, making decisions that are best

for Pexip. We spend our money wisely.

About Pexip

No Bullshit

We say and do what we think is right, with no

hidden agenda, and own up to it. We speak our

minds in a considered and constructive manner.

We do what needs to be done to help our

colleagues, partners, and customers. We take on

tedious or difficult work if it is the right thing to do

for Pexip, our team, our customers, or our partners.

We balance progress and perfection, delivering

high-quality and well-tested products.

We tell the truth and deliver on our promises. We

are authentic when dealing with each other and

our customers. We work and communicate in a

transparent and non-corporate way.

Highlights About Pexip Statement from the BoD Corporate Governance Financials 16Annual Report 2023Highlights Statement from the BoD Corporate Governance FinancialsAbout Pexip

With the growth of virtual engagement, user

expectations for seamless and secure experiences

are also rising. Users want immediate access to

their meetings (without downloads) and seamless

interoperability across their meeting platforms

and devices. They also demand increased privacy

in terms of safeguarding all personally identifiable

information (PII) and meeting data. This scenario

presents Pexip with continued opportunities in the

areas of interoperability, security, and workflow

customization.

Governments are also introducing stricter privacy

and data control regulations and are increasingly

focused on business continuity/disaster recovery.

The introduction of generative AI has awakened

the world to new risks to our meetings and

collaboration, with attack methods such as deep

fake. With cyberattacks rising, confidential business

information, critical services, and infrastructure

Market Overview

Global workplace trends show that collaboration

tools continue to gain popularity. Although remote-

only work has slightly decreased over the past

year, hybrid work arrangements still constitute a

considerable portion of the global workforce. As

organizations work towards creating sustainable

hybrid work models, they are also rethinking

their entire operations to meet the challenges

and opportunities of a constantly changing and

increasingly digital world.

Realizing the value of digitalization requires relevant,

valuable, and engaging customer engagement

practices. Patients expect remote medical visits;

citizens expect remote access to public offices;

and clients expect remote engagement with their

advisors. Entire industries are seeking to transform

their operations to become fully digital, as we see

with virtual justice and virtual banking.

Market

In today’s increasingly digital and interconnected landscape, we see that the demand for

privacy and control of data is increasing across organizations around the world. Pexip is

well-positioned to meet these evolving needs, delivering a flexible solution for seamless

meeting room interoperability, as well as secure and custom meeting solutions to satisfy

growing privacy and compliance requirements.

Pexip Connected Spaces

Video meeting-room interoperability

Pexip Secure & Custom Spaces

Video meetings for self-hosting or private clouds

When several video technologies need to

work seamlessly together

When complete privacy and control

over data is required.

17Annual Report 2023Highlights About Pexip Statement from the BoD Corporate Governance FinancialsAbout Pexip

Sip endpoints

Service-attached endpoints

(Teams Rooms, Zoom Rooms, etc)

Expect 15% p.a. growth in

video endpoint sales next

five years

are all at a heightened risk. Organizations must

implement robust and resilient communications

solutions that can reduce or withstand threats and

can be counted on when failure is simply not an

option. Among our customer landscape, we see that

enabling zero-trust policies and hosting technology

solutions in a geo-fenced or sovereign location is

required in more and more situations.

A strong partnership approach

Our collaboration and close partnerships with the

world’s leading meeting technology providers have

secured Pexip’s solid market position as the preferred

video engine that solves some of the issues users

face today.

In 2023, HP/Poly chose to sunset their video

infrastructure offering and enter a strategic

collaboration with Pexip. In this partnership, Pexip

provides a suite of on-premises and cloud-based

communications solutions for Poly’s customers.

Pexip’s solutions are a replacement for Poly’s Clariti

and RealConnect offerings.

Pexip continues its long-time collaboration with

Microsoft, working together to create features that

offer similar functionalities to Teams across SIP-

based meeting room solutions, such as older Cisco

Webex and Poly systems. With the increased focus

on sustainability, organizations are choosing to

update their existing infrastructure/meeting room

hardware. This combination of HP/Poly replacement

and infrastructure modernization has boosted Pexip’s

growth potential in a market that is otherwise

declining.

At the same time, we see many organizations

transitioning to a Teams-based operating model,

In this scenario, they still rely on Pexip to enable

smooth connections between Teams Rooms and

Zoom Rooms. The market for interoperability

between service-based devices (Teams Rooms

and Zoom Rooms) is expanding rapidly, and

Pexip predicts this will mark the second wave of

interoperability with significant growth potential for

our company.

The Connected Spaces market

The need to connect any room to any meeting is

growing, and it’s in fulfilling this need that Pexip

stands out from the pack, taking a leading role in

the any-to-any market. As more meeting solutions

enter the market, Pexip is well positioned for growth

due to its unique technology and historical strengths

that enable any meeting solution to connect to any

room or device.

Our connected spaces position is grounded in

these market developments and Pexip attributes:

• We believe that interoperability will continue to

be relevant as users require easy ways to connect

to all types of digital meetings from physical

meeting rooms - regardless of the equipment in

the room.

• Pexip has very strong capabilities for applications

requiring SIP-based interoperability, and strong

industry partnerships that drive customer

awareness and growth.

• For any-room-to-any-meeting interoperability,

Pexip is positioned as the technology leader

and works to collaborate closely with world-

leading meeting providers to build ultimate

user experiences across rooms and meetings

everywhere.

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Public Cloud

Focused Rich

Sovereign/geo-fenced Cloud Self-Hosted

TRUST

FEATURES

The Secure and Custom Spaces market

The private cloud market is expected to grow by approximately 30% annually in the years to come. Pexip

provides a complete virtual meeting solution for deployments in all self-hosted or sovereign-based systems.

Pexip also integrates with complementary solutions, such as secure chat providers, to offer a full collaboration

service suite. Pexip is the leading provider in this solutions area and has built a reputation as a trusted partner to

deliver secure meetings to regulated industries.

Our secure and custom spaces position is grounded in these market developments and Pexip attributes:

• Increasing compliance requirements drive

the need for self-hosted meeting solutions

with sovereign data management. Pexip’s

technology is uniquely suited for self-hosted

deployments from private cloud to sovereign

cloud, to on-premises, and even air-gapped.

• The Pexip Video Platform is a leading solution

for self-hosted meetings. Pexip has a clear

technological advantage by being a modern,

easy-to-manage solution with unique

customization capabilities.

• Programmable video (Video Platform as a

Service) enables organizations to build custom

video workflows based on available software

components. Pexip can securely deliver the

building blocks for rapid development. The

solution can be hosted in private deployments

and offer several innovations in this developing

market.

• Pexip works closely with Nvidia to enable

private AI in the Secure Video Meetings

segment. Secure provisioning of AI features

such as voice-to-voice translation is in demand

across governments and the public sector.

19Annual Report 2023Highlights About Pexip Statement from the BoD Corporate Governance FinancialsAbout Pexip

Customers and offering

The Pexip experience is easy, private, compliant, and customizable. In a world where video

is how we work, technology must adapt to the ever-changing needs of both users and

organizations. Pexip has built a technology that is flexible and universal, addressing all the

needs of a modern organization.

To provide customers with the best solutions

possible, Pexip works with technology alliances and

a global ecosystem of channel partners and service

providers to create powerful customer solutions. The

various routes to market help customers purchase

and implement Pexip technology in a way that meets

their needs for service, support, operation, and

procurement.

Many customers choose to enable Pexip as a service

while others demand complete control of their

solution. Pexip offers customers full flexibility in

how they deploy and host software. What makes

Pexip unique is the modern and advanced self-

hosted platform that can be deployed on-premises,

in a private or sovereign cloud, or an air-gapped

environment, all while being easy to install, run, and

manage.

A unique aspect of the solutions is customization

capability. Pexip lets customers design fully

customized solutions specific to their business

needs. Workflows designed by Pexip help

organizations meet the demands of their clients

expecting personalized, branded, private and

seamless experiences.

SOFTWARE AS A SERVICE PLATFORM AS A SERVICE SELF-HOSTED

Government and large enterprise

organizations

Pexip is a leading vendor in the government, public

sector, healthcare, judicial, finance, military, and

defense sectors. These organizations seek vendors

who are industry leaders and have high standards

for quality, security, and regulatory compliance.

They require global delivery capacity with complete

service responsibility and prioritize excellent user

experience, documentation, and support.

There has been an increase in demand for regulatory

compliance, particularly in government and

regulated industries such as healthcare. Pexip is

experiencing an increase in demand as a result of its

compliance and technical capabilities, outstanding

documentation, and exceptional service and

support.

Technology Service Providers

Pexip collaborates with some of the biggest

service providers worldwide to develop customized

solutions for large public sector organizations. We

also support smaller technology developers looking

to enhance their solutions by incorporating high-

quality video capabilities.

20Annual Report 2023Highlights About Pexip Statement from the BoD Corporate Governance FinancialsAbout Pexip

Pexip Connect Product Portfolio

Join any meeting from any meeting room. The Pexip Connect portfolio provides interoperability between

meeting rooms and meeting technologies.

Pexip Connect Standard

Pexip Connect Standard offers best-

in-class interoperability combined with

modern software-based infrastructure.

Complete management and analytics.

All in one.

Pexip Connect for Teams

Teams Rooms. Join any meeting, or place and

receive calls to and from anyone.

Pexip Connect Essentials

Use SIP/H323 systems to join Microsoft

Teams or Google Meet meetings.

Pexip for Government

FedRAMP® and StateRAMP®

Authorized Interop for Microsoft Teams,

employing IL2 security.

21Annual Report 2023Highlights About Pexip Statement from the BoD Corporate Governance FinancialsAbout Pexip

Pexip Secure Meetings Product Portfolio

Pexip Secure Meetings are a self-hosted and complete, high-quality virtual meeting, that meets both industry

and government demands for privacy, data sovereignty, certification, and business continuity. Pexip offers

several industry-specific solutions.

Pexip Secure Meetings

for Defense

Collaboration you can rely on for

Defense. Unified communications for

secret and above.

Pexip Secure Meetings for Health

Secure, reliable video visits for healthcare

providers and patients.

Pexip Secure Meetings

for Government

Sovereign and compliant video meeting

solution providing secure and private

communication for government officials,

agencies, and citizens.

Pexip Secure Meetings for Justice

Enable remote justice procedures with a

secure, private, and tailored solution to solve

the unique challenges of the court system.

22Annual Report 2023Highlights About Pexip Statement from the BoD Corporate Governance FinancialsAbout Pexip

Pexip Video Platform

The Pexip Video Platforms offer a modern solution for industry-leading flexibility and customization, with full

ownership and control of users, deployment, and data.

Pexip Video Platform Self-Hosted

The only customizable, high quality and secure video platform designed for complete control and

flexibility

Pexip Video Platform as a Service

Programmable video hosted by Pexip. An easy-to-use video engine designed for regulated industries.

A highly customizable, integrator-friendly video platform as a service, with top-tier privacy and

compliance.

23Annual Report 2023Highlights About Pexip Statement from the BoD Corporate Governance FinancialsAbout Pexip

Strategy and targets

Pexip’s mission is to provide seamless video communication to all organizations regardless

of technology platforms and security requirements. 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 two main markets

with our solutions.

Within the video infrastructure and interop market,

Pexip has a clear leadership in interoperability

between different video platforms. As one of two

main players and the only independent provider in

this segment, we are well positioned to create and

develop partnerships with other industry players,

such as Microsoft, Google, HP and others. 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.

Pexip’s medium term financial targets are to

consistently deliver above 10% growth in annual

recurring revenues and have an EBITDA margin

above 20% with a high cash conversion. The

company aims to do this by focusing on niches

where Pexip has a unique competitive advantage

and a path to become the clear market leader.

+10%

growth in annual recurring revenues

+20%

EBITDA margin with a high cash conversion

Clear market leader

Technology leader in core markets

REVENUE

PROFITABILITY

24Annual Report 2023Highlights About Pexip Statement from the BoD Corporate Governance FinancialsAbout Pexip

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. 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

Business Services, 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.

Strategic &

solution partners

Customers

Products & components Integration & solutions

Customer requirement solved

25Annual Report 2023Highlights About Pexip 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 is the way organizations run

their operations. Pexip’s mission is to provide seamless

communication to all organizations regardless of

technology platforms and security requirements.

Today, Pexip video technology connects everything

from business meetings to ultra-secure government

meetings, medical appointments, and court

proceedings.

In a world of video everywhere, 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 2023

Sustainability Report. The report provides an overview of Pexip’s material ESG topics and

its performance metrics for 2023. The report has been prepared in reference to the Global

Reporting Initiative (GRI) Standards.

26Highlights About Pexip Statement from the BoD Corporate Governance Financials Annual Report 2023About 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:

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 learns from its partnership with Team

Aker Dæhlie how to deliver equal opportunity to

perform, and has several ongoing practices and

forums to assess, plan, and improve initiatives

that ensure diversity in recruitment, succession

planning, and leadership.

Pexip’s commitment to secure communication

through privacy and control of data is unrivalled.

The collaboration with Nvidia further positions

Pexip as a leader in providing secure AI in

self-hosted and private-cloud environments.

The growing political tension worldwide has

increased the need for sovereign solutions where

organizations own and control all data.

Pexip has 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.

These are Pexip baseline measures for 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

27Annual Report 2023Highlights About Pexip Statement from the BoD Corporate Governance Financials

Statement from the Board

of Directors

In 2023 Pexip has delivered a significant transformation resulting in a return to growth and

going from a clear negative cash flow to being an EBITDA profitable, cash-flow positive

company. The company has doubled down on its key target markets in Connected Spaces

and Secure & Custom video meetings. Increased technology differentiation as well as

the addition of a major new strategic partnership with HP|Poly has enabled the company

to improve its ARR growth throughout 2023 and we exit the year with a much better

momentum than we entered 2023 with.

The Board sees a strong market opportunity for Pexip, 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 between employees, and Pexip is in a good

position to support our customers with this. We continue to see the emergence of several

niche markets adjacent to the global video and collaboration market 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 vital 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.

Statement from the BoD

28Annual Report 2023Highlights About Pexip Statement from the BoD Corporate Governance Financials

In total Pexip grew its subscription base in 2023

to USD 102.8 million dollars at the end of 2023, up

from USD 99.6 million at the end of 2022.

Organization and management

There have been no changes to senior management

during 2023. The company’s two main teams are

the commercial team responsible for sales and

customer success in Pexip’s target markets, and

the engineering team responsible for software

development, service operations, support and

product development. In addition the company has

a small headquarter team responsible for people and

development, finance and marketing.

Pexip has worked to continuously optimize its

operations during 2023 by consolidating roles

and removing support functions. This has led to

a modest reduction in staff from 329 at the start

of 2023 to 304 at the end of the year. The current

organization is designed to further execute on

Pexip’s revenue strategy going into 2024 and deliver

on the company’s strategic and financial targets.

Financial review

(Figures in brackets = same period prior year or

relevant balance sheet date).

Consolidated revenue was NOK 993.6 million for

the full year 2023 (NOK 867.1 million). The revenues

stem from both software and software as a service

sales, contributing NOK 534.9 million (NOK 458.9

million) and NOK 458.7 million (NOK 408.2 million)

respectively. The product area Connected Spaces

make out the majority of the Software as a Service

revenues as well as some software revenue, while

the Secure and Custom product area mainly

contribute to software revenues. The increase was

driven by currency effects as well as underlying

sales growth. Europe, Middle East, and Africa

(EMEA) was the largest sales theatre, accounting

for NOK 501.5 million (NOK 471.9 million)

representing 50% of group revenue in the period

(54%), followed by Americas, accounting for 416.5

million (NOK 316.9 million) representing 42% (37%),

and Asia-Pacific (APAC), accounting for NOK 75.6

million (NOK 78.2 million) representing 8% (9%).

Cost of sale amounted to NOK 99.0 million (NOK

93.8 million), reflecting a gross margin of 90%

(89%). Cost of sales increased due to higher hosting

and network costs driven by increased traffic and

usage of the Pexip as-a-Service offering.

Operating expenses consist mainly of salary and

personnel expenses and other operating expenses.

Salary and personnel expenses amounted to NOK

621.4 million (NOK 719.7 million), which is 63%

of revenues in the period (83%). The reduction is

mainly due to the reduction in employees over the

last twelve months.

Other operating expenses amounted to NOK 159.9

million (NOK 237.5 million), which reflects 16% of

revenue (27%). The reduction is due to the cost-

cutting initiatives and the effects were realized

across multiple cost categories.

Other gains and losses related to restructuring

amounted to a loss of NOK 10.9 million (NOK 61.3

million) and is related to restructuring.

Earnings before interest, tax, depreciation, and

amortization (EBITDA) amounted to NOK 102.4

million in 2023 (negative NOK 245.3 million),

reflecting a 10% EBITDA margin (negative 28%).

Depreciation, amortization and impairment costs

were NOK 199.1 million for the period (NOK 115.1

million). The main difference compared to 2022 is

the impairment of goodwill related to the acquisition

of Skedify B.V in 2021 of NOK 63.6 million. Further

information is available in the notes to the annual

accounts.

Net financial income was NOK 33.2 million (NOK

43.6 million) and was mainly related to interest

income and exchange differences.

Profit before tax was negative NOK 63.5 million in

2023 (negative NOK 316.8 million). Profit after tax

was negative NOK 79.8 million (negative NOK 262.2

million).

Financial position

Pexip continues to have a very robust financial

position as the company has a solid cash buffer, no

material interest bearing debt as of Q4 2023 and a

positive cash flow. Total assets amounted to NOK

2,021 million (NOK 2,087 million at the end of Q4

2022), and total equity amounted to NOK 1,555

million (NOK 1,597 million at the end of Q4 2022).

Statement from the BoD

29Annual Report 2023Highlights About Pexip Statement from the BoD Corporate Governance Financials

Current assets amounted to NOK 769 million

(NOK 679 million at the end of 2022). The increase

is mostly related to the increase in Cash and cash

equivalents to NOK 523 million (NOK 419 million

at the end of 2022). Trade and other receivables

decreased to NOK 184 million (NOK 199 million at

the end of 2022).

Non-current assets amounted to NOK 1,252 million

(NOK 1,408 million at the end of 2022). The main

change is the reduction in goodwill to NOK 599

million (NOK 663 million) related to the acquisition

of Skedify B.V, as well as a reduction in right-of-use

assets and other intangible assets.

Contract costs increased to NOK 299 million (NOK

286 million at the end of 2022).

Total liabilities were at NOK 466 million (NOK 490

million at the end of 2022). The reduction is mostly

due to a decrease in Trade and other payables as

well as lower lease liabilities and despite an increase

in contract liabilities. Of this, NOK 2 million are

borrowings (NOK 4 million at the end of 2022).

Current liabilities decreased to NOK 405 million

(NOK 415 million at the end of 2022). Of this, NOK

255 million are contract liabilities (NOK 231 million

at the end of 2022).

Non-current liabilities amounted to NOK 61 million

(NOK 75 million at the end of 2022).

Cash flow

Cash flow from operating activities was NOK 177.6

million for 2023 (negative NOK 182.5 million for

2022). The positive cash flow reflects the positive

operating EBITDA as well as a positive development

in working capital, as well as a positive adjustment

from non-cash share based costs in the P&L.

Cash flow from investing activities was negative

NOK 51.2 million for 2023 (negative NOK 110.3

million). The main driver was investments in

software development as well as a final payment

from an acquisition of a service provider customer

base.

Cash flow from financing activities was negative

NOK 28.2 million for 2023 (negative NOK 121.0

million) primarily related to lease payments of NOK

21.7 million.

In total, Pexip had a net cash flow of NOK 98.1 for

2023 (negative NOK 413.8 million). In addition, there

was an exchange gain of NOK 5.2 million, resulting

in a positive change in cash position of NOK 103.4

million (negative NOK 384.5 million).

As a result of the positive cash flow for the year and

the strong liquidity position of the Company, the

Board of Directors will propose a dividend of NOK 1.1

per share for 2023 to the Annual General Meeting in

April 2024. At the date of this report, the Company

has 104,429,671 shares outstanding, of which

2,842,867 are held by the Company itself.

Outlook

In the long-term, Pexip believes that the market for

enterprise-grade video communication will continue

to increase due to the increased adoption and usage

of video communication, and increased awareness

of sustainability. Pexip has unique video technology

with capabilities within security, interoperability,

and flexible deployments. This makes the company

well-positioned as enterprises and public sector

organizations continue to adopt hybrid working

models. Furthermore, Pexip believes in the increased

use of video in organizations’ workflows with their

clients/customers, creating additional new and

significant market opportunities. In particular,

the use of video for mission-critical, high-security

meetings has increased. This is the foundation of

the focused strategy Pexip is executing, pursuing

market-leading positions in Secure and Custom

Video and Connected Spaces.

Pexip’s medium term financial targets are to

consistently deliver above 10% growth in annual

recurring revenues and have an EBITDA margin

above 20% with a high cash conversion. The

company aims to do this by focusing on niches

where Pexip has a unique competitive advantage

and a path to become the clear market leader.

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.

Statement from the BoD

30Annual Report 2023Highlights About Pexip Statement from the BoD Corporate Governance FinancialsStatement from the BoD

Subsequent Events

There were no subsequent events after December

31, 2023.

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 profit of NOK 10.4 million in 2023 (Loss of NOK

383.1 million in 2022), mainly related to fees for

external services and operating expenses as well as

financial income.

For 2023 the Pexip Group had a negative net profit

resulting from a positive EBITDA and a negative

EBIT from high depreciation and amortization costs.

The company had a positive change in cash of NOK

103 million from a positive operating cash flow. As

a result, and due to the strong balance sheet, the

Board will recommend a dividend of NOK 1.1 per

share for 2023 to be paid in Q2 2024, for a total of

NOK 111.7 million.

The gain for the year of the parent company, Pexip

Holding ASA, of NOK 10.4 million has been allocated

in its entirety to dividend. The remaining dividend

will be allocated from 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. The Board considers

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 emissions, 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

only 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.

People and organization

Pexip aims to be a leading People 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 our goal is

to offer an equal opportunity, safe, and risk-free

working environment fostering individual growth

31Annual Report 2023Highlights About Pexip Statement from the BoD Corporate Governance Financials

and enjoyment at work. In Pexip, we have a

Diversity, Equity and Inclusion (DEI) team working

actively to promote and improve topics within

equality, diversity, and inclusion within Pexip. The

team comprises seven employees in Pexip, three

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. We are committed to

creating a diverse and inclusive environment at

work and are proud to be an equal-opportunity

employer. All qualified applicants will receive

the same level of consideration for employment;

everyone we hire will receive the same ability

for training, compensation, and promotion.

Promotion-processes includes involvement from

HR to ensure equal opportunities for all. We have

a leadership training program, where one of the

sessions is dedicated to the theme One Team,

where diversity and inclusion is a key part. We

have forums discussing gender, neurodiversity and

LGBTQ related topics.

Employees and gender balance

At year end, the number of employees in Pexip

in permanent positions amounted to 304 (2022:

329), of which 240 were male and 64 were female.

The employees are located in 25 countries.

Pexip has offices in Norway, Sweden, Belgium,

Spain, France, Italy, Netherlands, Germany, UK,

Australia, USA, Singapore and Japan.

At the end of 2023, the percentage of female

employees was 21.1%, compared to 20.4% at

the end of 2022. 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 2023

*** KANTAR / ODA-Nettverk 2019

The senior leadership team comprises seven

employees, of which two are female. The Board

Statement from the BoD

* in non-terminated positions

currently has five members, of which two are

female.

Going forward, our goal is to be a diverse company,

offering equal opportunities, and a good working

environment for all employees. We recognize

there is still work to do, but we are committed to

creating more opportunities for a more balanced

representation and our dedicated DEI-team works

toward this. We work actively in each recruitment

process to ensure we create equal opportunities for

all and to increase female representation.

Our work for equality is underpinned with several

policies. Our code of conduct includes our

commitment to creating an equal opportunity

workplace, free from discrimination, harassment,

and victimization. Our 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 our culture, and

meetings and events shall be held virtually where

this is appropriate and possible.

Through 2023, Pexip has collaborated with Team

Aker Dæhlie to support BEYOND. Team Aker Dæhlie

is the first professional athletic team to include

athletes from both genders across 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

equal opportunities.

Employees

2023 2022 *

Male Female Male Female

# of total employees 240 64 262 67

# of full-time employees

at end of year

237 61 260 64

# of part-time employees

at end of year

3 3 2 3

# of temporary employees

at end of year

0 0 0 0

# of involuntary part-time

employees at end of year

0 0 0 0

32Annual Report 2023Highlights About Pexip Statement from the BoD Corporate Governance Financials

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 2023, the average sick-leave was

0.94% (2022: 0.8%). During the year, 6 male and 7

female employees were on parental leave, where the

male employees took 37 weeks in total, while the

female employees took 122 weeks.

Statement from the BoD

Parental leave 2023 2022

Male Female Male Female

Employees entitled

to parental leave

240 64 262 67

Employees that

took parental leave

of more than one

month

2 7 6 5

Weeks of parental

leave during the

year

37 122 83.8 124.6

Sick leave 2023 2022

Male Female Male Female

# of employees on

sick leave during

the year

68 39 113 40

# of days of sick

leave during the

year

470 315 601 233

Research and Development (R&D)

A core activity for Pexip is R&D related to distributed

software platforms for videoconferencing and

collaboration. During 2023 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 custom video solutions for large international

corporations and public sector organizations. Of the

total R&D in 2023, Pexip capitalized NOK 35 million

(NOK 41 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

dierentiation. 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

33Annual Report 2023Highlights About Pexip Statement from the BoD Corporate Governance Financials

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

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

Statement from the BoD

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.

34Annual Report 2023Highlights About Pexip Statement from the BoD Corporate Governance Financials

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

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

Statement from the BoD

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. 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

35Annual Report 2023Highlights About Pexip Statement from the BoD Corporate Governance FinancialsStatement from the BoD

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 December 31, 2023 was prepared

in accordance with the International Financial

Reporting Standards (IFRS), as adopted by the

European Union. As of December 31, 2023, Pexip’s

non-current assets amounted to approximately NOK

1,252 million, most of which are intangible assets

including NOK 599 million in goodwill. In 2023 Pexip

impaired NOK 64 million related to the acquisition

of Skedify B.V in 2021. 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

assumptions affecting the present 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 2023 there is solid headroom giving a moderate

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

2023.

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 above mentioned 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 challenges

during 2023 and to some extent so far in 2024, with

uncertain growth and high 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 2024 and has very

36Annual Report 2023Highlights About Pexip Statement from the BoD Corporate Governance FinancialsStatement from the BoD

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 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 together with the other financial

reports at www.pexip.com/investor. The annual

statement on corporate governance for 2023 has

been approved by the Board and can be found in

this annual report.

A Directors and Officers Liability Insurance is in

place for members of the Board of Directors and

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, 2023, the share capital of Pexip

Holding ASA was NOK 1,566,445.065 divided into

104,429,671 ordinary shares with a par value of NOK

0.015. The share had a closing price on December

29, (last day the share was traded in 2023) of NOK

25.9 per share.

The turnover of shares is a measure of traded

volumes. On average, 215,080 Pexip shares were

traded on Oslo Børs every trading day in 2023.

As of December 31, 2023, Pexip had 5,385

shareholders registered in the VPS. The

shareholders were from 58 different countries

across the world, with 26.3% of holdings were

held by shareholders outside Norway. The top 20

shareholders held 47.5 of the registered shares

excluding shares held by the company.

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

dialogue 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.

37Annual Report 2023Highlights About Pexip Statement from the BoD Corporate Governance Financials

Board of Directors

SIGNATURE PAGE

Oslo, March 20, 2024

Board of Directors and CEO of Pexip Holding ASA

Statement from the BoD

Kjell Skappel

Chair of the Board

Trond K. Johannessen

CEO

Irene Kristiansen

Board Member

Phillip Austern

Board Member

Silvija Seres

Board Member

Geir Langfeldt Olsen

Board Member

38Annual Report 2023Highlights About Pexip Statement from the BoD Corporate Governance 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

2023 follows below. The statement was approved by

the Board on March 20, 2024.

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

investor.pexip.com/corporate-governance/articles-

of-association.

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, 2023, Pexip had a consolidated

equity of NOK 1,555 million, corresponding to an

equity ratio of 77%.

The Board considers that Pexip has a capital

structure that is appropriate for its objectives,

strategy and risk profile.

39Annual Report 2023Highlights About Pexip Statement from the BoD Corporate Governance 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 introduced a policy in 2023 to

distribute 50-100% of the free cash flow generated

in the previous calendar year. In addition, the Board

has recommended an extraordinary dividend of

NOK 0.5 per share as the board recognizes that the

company has excess liquidity. In total, the Board

will recommend to the annual general meeting that

the company pay a dividend of NOK 1.1 per share

for 2023. The company has not paid any dividends

on its Shares during the financial years ended

December 31, 2022, 2021, 2020, 2019 and 2018.

Board Mandates to Increase the Share

Capital

At the Annual General Meeting of the company on

April 20, 2023 the Board was authorized to increase

the share capital of Pexip for general purposes by

up to NOK 156,000 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 2024, however

no longer than until June 30, 2024. The Board did

not issue any shares in relation to this authorization

since the Annual General Meeting on April 20, 2023

and up to the date of this report.

At the Annual General Meeting of the company on

April 20, 2023 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 2024, however no longer than until

June 30, 2024. No new shares have been issued

by the Board in relation to this authorization since

the Annual General Meeting on April 20, 2023 and

up to the date of this report.

4. Equal Treatment of

Shareholders

The company’s share capital is NOK

1,566,445.065, divided into 104,429,671 shares,

each with a nominal value of NOK 0.015.

The company held 2,842,867 own shares at the

end of 2023.

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. The notes to the consolidated financial

statements for 2023 provides details about

transactions with related parties as well as

financial relationships related to the directors and

executive personnel.

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 and

40Annual Report 2023Highlights About Pexip Statement from the BoD Corporate Governance FinancialsCorporate Governance

participate in the general meeting. The annual

general meeting will take place on April 12, 2024.

The Group’s financial calendar is published via

Oslo Børs and in the investor relations section of

investor.pexip.com.

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 Chair

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 right to participate and

vote at general meetings of the Company can

only be exercised by those who are shareholders

five business days prior to the general meeting

(the registration date). Shareholders who wish to

attend a general meeting of the Company shall

give the Company written notice of attendance

within a time limit given in the notice of the

general meeting, which cannot expire earlier than

two days before the general meeting.

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.

The Board may allow for shareholders to cast

written votes 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.

General-meeting notices provide information

on the procedures for attendance and voting,

including the use of proxies or permission to

cast written votes in advance. Shareholders who

cannot attend in person are encouraged to cast

written votes in advance or 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.

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 Chair of the Board and Chief Executive

Officer (CEO) are required to attend. Other

members of the Board are entitled to attend.

The general meeting is normally invited to vote for

individual candidates.

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

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

41Annual Report 2023Highlights About Pexip Statement from the BoD Corporate Governance FinancialsCorporate Governance

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 two years but may be reelected. 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 April 20, 2023

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 2024. There have been no changes to

the composition of the committee since 2020. 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 five shareholder-elected directors.

Directors and the Chair of the Board are

currently elected by the general meeting for a

one or two 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. No shareholder elected directors has

done paid work for or on behalf of the company

during 2023 beyond their responsibilities as board

members, which is compensated in line with the

decision of the annual general meeting.

Details on background, experience and

independence of directors are presented on Pexip’s

website.

10 board meetings were held in 2023, 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 notes to the consolidated financial

statements and in the biography of each board

member on https://investor.pexip.com/corporate-

governance-Board.

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

42Annual Report 2023Highlights About Pexip Statement from the BoD Corporate Governance FinancialsCorporate Governance

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, sustainability 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 has established specific sub-

committees to follow up the administration of the

Company. The Board has an audit committee and

a remuneration committee.

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

(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

43Annual Report 2023Highlights About Pexip Statement from the BoD Corporate Governance FinancialsCorporate Governance

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 and

sustainability 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

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 and sustainability 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

44Annual Report 2023Highlights About Pexip Statement from the BoD Corporate Governance FinancialsCorporate Governance

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 and annual financial statement and

other company reports such as the sustainability

report 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 2023.

None of the directors have undertaken any special

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 2023.

45Annual Report 2023Highlights About Pexip Statement from the BoD Corporate Governance FinancialsCorporate Governance

Changes to the Executive Management

and the Board

The annual general meeting on April 20, 2023

elected the following Board, in accordance with

the nomination committee’s proposal:

i. Kjell Skappel, chair

ii. Irene Kristiansen

iii. Phillip Austern

iv. Geir Langfeldt Olsen (new)

v. Silvija Seres (new)

Kjell Skappel, Irene Kristiansen, Geir Langfeldt

Olsen and Silvija Seres were elected for a term

of two years on April 20, 2023. Phillip Austern

was elected for two years in 2022, and was

re-confirmed for a term of one year. No deputy

members were elected.

There were no changes to the Executive

Management in 2023.

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

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.

46Annual Report 2023Highlights About Pexip Statement from the BoD Corporate Governance FinancialsCorporate Governance

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 2024 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 2023, the external auditor attended 5

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.

47Highlights About Pexip Statement from the BoD Corporate Governance Financials Annual Report 2023Corporate Governance

Board of Directors

SIGNATURE PAGE

Oslo, March 20, 2024

Board of Directors and CEO of Pexip Holding ASA

Kjell Skappel

Chair of the Board

Trond K. Johannessen

CEO

Irene Kristiansen

Board Member

Phillip Austern

Board Member

Silvija Seres

Board Member

Geir Langfeldt Olsen

Board Member

48Highlights About Pexip Statement from the BoD Financials Annual Report 2023Corporate 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

49Highlights About Pexip Statement from the BoD Financials Annual Report 2023Corporate Governance

Board of Directors

Geir Langfeldt Olsen

Board Member

Kjell Skappel

Chair of the Board

Silvija Seres

Board Member

Irene Kristiansen

Board Member

Phillip Austern

Board Member

50Highlights About Pexip Statement from the BoD Corporate Governance Financials Annual Report 2023

Financials

51Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

Consolidated Statement of Profit or Loss

Notes Year ended December 31

(NOK 1,000)

FY 2023 FY 2022

Revenue

3 993 582 867 056

Cost of sale 99 004 93 820

Salary and personnel expenses 4,23,24 621 435 719 687

Other operating expenses 5 159 880 237 544

Other gains and losses

29 10 908 61 290

EBITDA

102 355 -245 285

Depreciation and amortization 9,10,12 135 465 115 120

Impairment losses

11 63 647

Operating profit or loss

-96 756 -360 405

Financial income 6 19 194 7 959

Financial expenses 6 -2 707 -4 604

Net gain and loss on foreign exchange differences

6 16 737 40 264

Financial income/(expenses) - net 33 224 43 619

Profit or loss before income tax

-63 532 -316 786

Income tax expense 7 16 253 -54 538

Profit or loss for the year -79 786 -262 248

Profit or loss is attributable to:

Owners of Pexip Holding ASA -79 786 -262 248

Earnings per share

Basic earnings per share 8 -0.79 -2.58

Diluted earnings per share 8 -0.79 -2.58

52Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

Consolidated Statement of Comprehensive Income

Year ended December 31

(NOK 1,000)

FY 2023 FY 2022

Profit or loss for the year

-79 786 -262 248

Items that may be reclassified to profit or loss:

Exchange difference on translation of foreign operations 7 113 11 417

Total comprehensive income for the year -72 672 -250 831

Total comprehensive income is attributable to:

Owners of Pexip Holding ASA -72 672 -250 831

53Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

Consolidated Statement of Financial Position

(NOK 1,000)

Notes 12/31/2023 12/31/2022

ASSETS

Non-current assets

Property, plant and equipment 3,9 11 580 29 039

Right-of-use assets 3,10 42 730 77 154

Goodwill 11 598 998 662 645

Other intangible assets 3,12 125 516 178 606

Deferred tax asset 7 170 629 169 279

Contract costs 3,18 299 000 285 779

Receivables 4,13,19 1 163 1 602

Other assets

2 109 4 041

Total non-current assets

1 251 725 1 408 145

Current assets

Trade and other receivables 4,13,19 183 716 198 727

Contract assets 18 39 210 37 233

Other current assets 14 23 716 23 326

Cash and cash equivalents

15,19 522 692 419 306

Total current assets

769 334 678 592

TOTAL ASSETS 2 021 059 2 086 736

(NOK 1.000)

12/31/2023 12/31/2022

EQUITY AND LIABILITIES

Equity

Total equity

16 1 554 823 1 596 571

Non-current liabilities

Borrowings 17,19 2 190 16

Lease liabilities 10,19 31 427 57 560

Deferred tax liabilities 7 27 193 15 388

Other payables

19 69 2 526

Total non-current liabilities

60 879 75 490

Current liabilities

Trade and other payables 19,21 130 374 148 153

Contract liabilities 18 255 258 231 004

Current tax liabilities 7 3 525 5 002

Borrowings 17,19 132 4 077

Lease liabilities

10,19 16 069 26 439

Total current liabilities 405 357 414 675

Total liabilities

466 237 490 166

TOTAL EQUITY AND LIABILITIES 2 021 059 2 086 736

54Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

Board of Directors

SIGNATURE PAGE

Oslo, March 20, 2024

Board of Directors and CEO of Pexip Holding ASA

Kjell Skappel

Chair of the Board

Trond K. Johannessen

CEO

Irene Kristiansen

Board Member

Phillip Austern

Board Member

Silvija Seres

Board Member

Geir Langfeldt Olsen

Board Member

55Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

Consolidated Statement of Changes in Equity

Notes

capital

premium

Other

reserves

Translation

differences

Retained

earnings

Total

equity

(NOK 1,000)

Balance at January 1, 2022

1 556 2 115 938 86 018 -3 553 -291 770 1 908 191

Profit or loss for the year -262 248 -262 248

Other comprehensive income for the year

11 416 11 416

Total comprehensive income for the year 11 416 -262 248 -250 831

Capital increase/share issue 16 -270 -270

Buy/sell treasury share 16 -35 -87 404 -87 439

Share-based payments 24 26 920 26 920

Balance at December 31, 2022 1 521 2 115 938 25 265 7 863 -554 018 1 596 571

Balance at January 1, 2023 1 521 2 115 938 25 265 7 863 -554 018 1 596 571

Profit or loss for the period -79 786 -79 786

Other comprehensive income for the year

7 113 7 113

Total comprehensive income for the year 7 113 -79 786 -72 672

Buy/sell treasury share 16 3 106 109

Share-based payments 24 30 815 30 815

Balance at December 31, 2023 1 523 2 115 938 56 186 14 977 -633 803 1 554 823

56Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

Consolidated Statement of Cash Flows

Year ended December 31

(NOK 1,000)

Notes FY 2023 FY 2022

Cash flow from operating activities

Profit or loss before income tax -63 532 -316 786

Adjustments for

Depreciation, amortization and net impairment losses 9,10,12 199 112 115 120

Non-cash - share based payments 24 36 431 25 130

Interest income/expenses - net 6 -16 500 -3 952

Net exchange differences 6 -7 942 -18 656

Other adjustments 139

Change in operating assets and liabilities

Change in trade, other receivables and other assets 4,13,18,19 1 354 -19 134

Change in trade, other payables and contract liabilities 18,19,21 16 767 31 688

Interest received 6 19 004 7 958

Income taxes paid/refunded 7 -7 247 -3 843

Net cash inflow/outflow from operating activities 177 587 -182 475

Cash flow from investing activities

Payment for property, plant and equipment 9 -16 571 -21 965

Payment of software development cost 12 -34 629 -32 318

Payment for acquisition of subsidiary, net of cash acquired -56 009

Net cash inflow/outflow from investing activities -51 201 -110 292

Cash flow from financing activities

Proceeds from issuance of ordinary shares 16,20 3

Repayment of borrowings 17,20 -4 000 -1 919

Principal element of lease payments 10,20 -21 737 -27 399

Interest paid 6 -2 505 -4 006

Sale/(purchase) of treasury shares 16 -87 674

Net cash inflow/outflow from financing activities -28 239 -120 998

Net increase/(decrease) in cash and cash equivalents 98 148 -413 766

Cash and cash equivalents start of the period 419 306 803 852

Effects of exchange rate changes on cash and cash equivalents 5 238 29 219

Cash and cash equivalents end of the period 522 692 419 306

57Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

Note 1. General

Pexip Holding ASA is the parent company in the Pexip

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, Skedify NV, Pexip Japan

GK, Pexip Italy S.R.L and Pexip Spain SL. The Group`s

head office is located at Lilleakerveien 2a, 0283 OSLO,

Norway. Pexip Holding ASA is a public listed company on

the Oslo Stock Exchange (Norway) under the ticker PEXIP.

Pexip is a global technology company that delivers a

leading, end-to-end video conferencing platform and

digital infrastructure. Pexip offers both the self-hosted

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 Holding

ASA and its subsidiaries (collectively, the Group) for the

year ended December 31, 2023 was authorized for issue

by a resolution of the directors on March 20, 2024.

1.1 Adoption of new and revised accounting

standards

There are no new or changed standards and amendments

for the annual report period commencing on January 1,

2023 relevant for the company.

1.1.2 New and revised IFRS standards in

issue but not yet effective

The Group has not early adopted new and revised IFRS

standards published but not mandatory for December 31,

2023 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, 2023.

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.

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.

58Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

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 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

59Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

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 10% 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.

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.

60Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

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

complete 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 rep¬resent

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 con¬tract 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 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,

61Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

with the effect of any changes on estimates being

accounted for on a prospective basis.

Gains or losses arising from the disposal 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

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.

62Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

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 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.

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.

63Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

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 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

64Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

• 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 Groups share capital

and premium, other reserves, translation differences and

retained earnings. Other reserves includes 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.

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).

Refer to note 11 for sensitivity analysis of the impairment

test.

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.

65Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

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.

Full year 2023

1)Americas APACEMEA Total Pexip as-a-Service 245 915 187 456 25 279 458 651Self-hosted Software 255 567 229 062 50 302 534 931Total revenue 501 482 416 519 75 582 993 582Full year 20221)Americas APACEMEA Total Pexip as-a-Service 235 619 146 790 25 773 408 181Self-hosted Software 236 286 170 156 52 433 458 875Total revenue 471 905 316 946 78 206 867 056Timing of revenue recognition2023 2022Products and services transferred at a point in time 413 130 368 629Products and services transferred over time 580 452 498 426Total revenue 993 582 867 056

Europe, Middle East and Africa

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 2023, the five

largest represent approximately 26% of total revenue (28% for FY 2022), and the ten largest represent approximately 41%

(40% for FY 2022). 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.

66Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

Non-current assets

The following geographic information of non-current assets is based on the geographic location of the assets.

12/31/2023 12/31/2022Norway 232 221 328 338Europe (other than Norway) 98 706 95 155Americas 118 625 116 276APAC 29 275 30 808Total non-current operating assets 478 826 570 578

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)

2023 2022Wages and salaries 388 776 515 401Social security tax 67 454 71 581 Commission and bonus employees 115 271 86 766 Share-based payment expense (note 24) 36 431 25 130 Pension costs (note 23) 38 875 45 639 Other personnel cost 9 901 15 255 Salary cost capitalised -35 273 -40 084 Total 621 435 719 687Average number of labour-years employed during the year 354 516

Commission employees

Commission cost has increased due to change of accounting and cost principle in Q2 2022, recognizing all in-direct sales

commissions as cost immediately

Loan to employees

The Group provided unsecured loans to employees of NOK 50.6 thousand at December 31, 2023 (2022: NOK 192

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 2023.

Bonus agreements and severance pay

The bonus scheme and severance pay for Group management is disclosed in the management remuneration report for

2023.

67Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

Remuneration to board of directors in the parent company

The remuneration to board of directors is disclused in the management remuneration report for 2023.

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 2023.

Note 5 - Other operating expenses

(NOK 1,000)

2023 2022Sales and marketing 27 655 55 891Computers and software 45 765 53 243Fees for external services 48 718 62 901Travel expenses 15 228 23 820Other operating expenses 18 526 41 047Other lease expense 3 989 642Total 159 880 237 544

Auditor’s fees

The remuneration breakdown (excl. VAT) paid to Deloitte AS and their associates is as follows:

2023 2022Statutory audit 4 047 4 506Other assurance services 121Total 4 047 4 627

Note 6 - Financial Income and expenses

(NOK 1,000)

2023 2022Interest income 19 004 7 958 Other financial income 190 1 Financial income 19 194 7 958 Interest expense -631 -900 Interest expense on lease liabilities (note 10) -2 020 -3 106 Other financial expenses -56 -598 Financial expenses -2 707 -4 604 Net foreign currency gains and losses 16 737 40 264 Net financial income(expense) 33 224 43 619

68Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

Note 7 - Income tax expense

(NOK 1,000)

Specification of income tax expense: 2023 2022Current tax on profits for the year 4 656 4 992 Changes in deferred tax 10 482 -59 590 Adjustments for current tax of prior periods 1 116 61 Tax on profit/(loss) 16 253 -54 538

Reconciliation from nominal to effective income tax rate: 2023 2022Profit/(loss) before tax -63 532 -316 786Estimated income tax according to nominal tax rate of 22 % -13 977 -69 693Effect from different tax rate in other countries -1 070 -1 054Effect of changes in tax rules and rates -279 -184Non-deductible expenses 9 310 -19 803Non-taxable income -639 24 852Share-based payment expenses 6 217Change in unrecognised deferred tax assets 14 573 8 716Adjustments for prior period tax 188Other items 1 930 2 629Income tax expense 16 253 -54 538Effective income tax rate -26% 17%

Changes in tax rate

There are no material changes in tax rates in the Group for 2023

Deferred tax balances: 12/31/2023 12/31/2022Deferred tax assets:Tax losses 212 006 211 324Tangible and intangible assets -6 878 -11 651Receivables 1 034 1 193Contract liabilities 34 373 26 947Current and non-current liabilities 4 229 13 457Set-off tax -36 106 -47 630Net deferred tax assets after set-off 208 657 193 640Unrecognised deferred tax assets -38 028 -24 361Net deferred tax assets 170 629 169 279Deferred tax liabilities:Tangible and intangible assets 63 299 63 018Set-off tax -36 106 -47 630Net deferred tax liabilities 27 193 15 388

69Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

Deferred tax Tax Contract Current and non-assets Movements lossesliabilitiescurrent liabilities Other Total At January 2023 211 324 26 947 13 457 -10 458 241 270 (Charged)/credited - to profit or loss -12 985 7 426 -9 229 4 614 -10 173 - not recognized 13 667 13 667 At December 2023 212 006 34 373 4 229 -5 844 244 764

Deferred tax Tangible and Current Contract Other liability Movements intangible assetsassetsliabilitiesdifferences Total At January 2023 63 018 63 018 (Charged)/credited - to profit or loss 281 281 At December 2023 63 299 63 299

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, 2023 and 2022

a deferred tax asset is recognised for all the individual taxation authorities where the Group conduct business, with the

exception for Pexip Belgium.

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 177.7 million as at December 31, 2023

(2022: NOK 191.2 million) have been recognised based on the same assessment of the probability for sufficient taxable

profit in the future.

Temporary differences relating to the Pexip Belgium for which deferred tax assets have not been recognised was in the

amount of NOK 38.0m in 2023 (2022: 24.3m).

Tax losses carried forward 12/31/2023 12/31/2022Expire (2035 and forward) 5 177 20 354Never expires 924 762 885 170Total tax losses carried forward 929 939 905 525Tax losses for which deferred tax asset is recognised 784 156 801 691Tax losses for which no deferred tax asset is recognised 145 783 80 516Potential tax benefit from unrecognized assets 36 446 20 129

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 53.8 million at December 31, 2023

(December 31, 2022: NOK 43.8 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 149.9 million) and Pexip AS (NOK

553.2 million).

70Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

Note 8 - Earnings per share

(NOK 1,000)

Earnings 2023 2022Earnings for the purpose of basic earnings per share beingnet profit attributable to the owners of the company -79 786 -262 248Effect of dilutive potential ordinary sharesEarnings for the purpose of diluted earnings per share -79 786 -262 248Number of sharesWeighted average number of ordinary shares for the purposeof basic earnings per share 101 343 895 101 495 376Effect of dilutive potential ordinary shares: Share options 922 946 122 044Weighted average number of ordinary shares for the purposeof diluted earnings per share102 266 841 101 617 420Earnings per shareBasic earnings per share -0.79 -2.58 Diluted earnings per share -0.79 -2.58

12/31/2023 12/31/2022Overview of outstanding share optionsShare-based payments awards (refer to note 24) 8 730 775 5 252 950Option over own equity instruments (refer to note 21)Total options and RSUs outstanding 8 730 775 5 252 950

Dilutive potential ordinary shares of 922,946 for 2023 (2022: 122,044) differs from total outstanding options at December

31, 2023 (and December 31, 2022). The main reasons for this is that potential ordinary shares used to calculated 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.

71Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

Note 9 - Property, plant & equipment

(NOK 1,000)

Plant and Fittings and machineryfixtures TotalAcquisition cost January 1, 2022 18 754 41 791 60 643Additions 2 545 6 755 9 300Exchange differences 1 0 2Acquisition cost December 31, 2022 21 300 48 547 69 945Additions 3 564 2 464 6 027Disposals cost -1 995 -2 923 -4 919Reclassification between categories 15 875 -15 875Exchange differences 791 1 885 2 579Acquisition cost December 31, 2023 39 534 34 098 73 632Accumulated depreciation and impairment losses January 1, 2022 9 493 14 939 24 404Depreciation for the period 6 089 10 207 16 295Exchange differences 1 -1 1Accumulated depreciation and impairment losses December 31, 2022 15 582 25 146 40 700Depreciation for the period 8 022 14 393 22 415Disposals -1 818 -265 -2 083Reclassification between categories 10 982 -10 982Exchange differences 614 378 992Accumulated depreciation and impairment losses December 31, 2023 33 381 28 671 62 052Carrying value at December 31, 2022 5 717 23 402 29 039Carrying value at December 31, 2023 6 153 5 427 11 580Estimated useful life and depreciation plan is as follows:Useful life 3 - 5 years 3 - 5 yearsDepreciation plan Linear Linear

Property, plant and equipment was pledged as security for liabilities in 2022, this obligation is resolved by the end of 2023.

72Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

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 Plant and Buildingsmachinery TotalAs at January 1, 2022 95 779 7 583 103 362Additions (new leases) 2 757 438 3 195Adjustments -6 852 -6 852Depreciation expense -21 543 -2 418 -23 961Exchange differences 1 273 138 1 411As at December 31, 2022 71 413 5 741 77 154Additions (new leases) 4 859 135 4 994Adjustments -19 518 -19 518Depreciation expense -21 240 -905 -22 145Exchange differences 2 051 195 2 245As at December 31, 2023 37 564 5 166 42 730Lower of remaining lease term or useful life 2-10 years 3-5 yearsDepreciation method Linear Linear

Set out below are the carrying amounts of lease liabilities and the movements during the period:

2023 2022As at January 1 83 999 113 527Additions (new leases) 4 994 3 195Adjustments -20 238 -6 859Principal element of lease payments -21 737 -27 399Exchange differences 477 1 536As at December 31 47 495 83 999

Maturity analysis of lease liabilities 12/31/2023 12/31/2022Less than 6 months 6 953 12 5256-12 months 9 453 12 7171-2 years 12 836 20 7252-5 years 20 646 32 273Over 5 years 963 10 199Total face value 50 853 88 440

Carrying amount 47 495 83 999Current 16 069 26 439Non-current 31 427 57 560

73Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

The following are the amounts recognised in profit or loss and other comprehensive income:

2023 2022Depreciation expense for the right-of-use asset 22 145 23 942Interest expense on lease liabilities 2 015 2 896Exchange difference (included in OCI) 288 66Exchange difference (included in financial income) 69 1 536Expense related to short-term leases (included in other operating expenses) 3 989 625Total amount recognised in profit or loss 28 507 29 065

The Group had total cash outflows for leases of NOK 29.9 million in 2023 (NOK 30.9 million in 2022).

An incremental borrowing rate (IBR) of Nowa + 3% has been applied on all new leases during the 2023 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 initially 12 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. Most of the leases are one year

leases with renewal options. The lease contract with longer durations does not have any renewal options. The Group’s

potential future lease payments not included in the lease liabilities related to extension options is NOK 6.2 million (gross) on

December 31, 2023 (NOK 14.8 million on December 31, 2022).

Pexip has entered into a lease with commencement date in january 2024 that is not recognised in lease liability. The value

of this lease liability is NOK 8.5 million and the duration is 69 months.

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 2023 and 2022.

74Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

Note 11 - Goodwill

(NOK 1,000)

12/31/2023 12/31/2022Carrying amount of Goodwill January 1st 662 645 662 645Impairment of Goodwill -63 647Carrying amount of Goodwill December 31st 598 998 662 645

The carrying amount of goodwill in the Group amounts to NOK 599 million as of December 31, 2023. Goodwill is derived

from the acquisition of Videxio AS (599 million), which was completed in 2018. Goodwill is tested on an aggregate (Group)

level since the synergies stemming from the business combination will materialize on the group level that means that

there is only one single CGU. During 2023 the goodwill related from the acquisition of Skedify B.V. in 2021 was considered

impaired, leading to the reduction in goodwill during 2023.

Goodwill is tested for impairment annually or more frequently if there are indications that goodwill might be impaired,

and has been assessed on a quarterly basis through 2023. Testing was most recently conducted in Q4 2023 based on the

updated business plan for the company at this time and the balance sheet per 30 September 2023. 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

2024 to 2028. 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 forward-looking revenue assumptions are overall

in line with 2023, as are the assumption on cost development. These are 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 11.42% (before tax) (2022:

11.27%). 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 11 December,

i.e. the date of board approval of the 2024-2028 business plan. 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 previous years.

Sensitivity analysis

Review for the CGU indicated that the recoverable amount exceeds carrying value by NOK 907 million at the balance sheet

date. The Group has prepared a sensitivity analysis of the impairment test for key assumptions: terminal growth rate,

discount rate and EBITDA change.

75Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

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

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 summarized below:

• an absolute increase in the WACC of 7.87%, from 11.42% to 19.29%, or

• an absolute reduction of 6.55 percentage points in the business plan growth rate and perpetual growth rate, from

perpetual growth of 2.93% to growth of -3.62%, or

• a reduction of 42% 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. For 2023 the company’s standard sensitivity ranges (+- 4% for growth and WACC, +-

40% for EBITDA) does not lead to the carrying amount of goodwill exceeding the recoverable amounts.

Impairment of Goodwill related to Skedify acquisition

The Goodwill from Skedify has been assessed against a single, company-wide Cash Generating Unit together with the

rest of the Pexip goodwill since the acquisition in 2021, and including at the time of the impairment test above. At the end

of Q4 2023 the company changed strategy and executed a cost reduction in the Pexip Engage business area, which will

manage the unit as a stand-alone business and have a positive contribution to overall cash flow and profitability. While this

improves the short-term results, it may have a negative impact on the future growth of the business unit, and due to this

management finds it prudent to impair the value of the goodwill related to the Skedify acquisition.

Skedify was acquired on November 8, 2021, with part of the acquisition amount being accounted for as goodwill of NOK

63.6 million. Further details on this can be found in the 2021 Annual Accounts. The impairment of goodwill of NOK 63.6

million has been recognized in the P&L for 2023, reducing Non-current assets with the same amount.

Customer Re-aquired Software contracts Patents rights Total Acquisition cost January 1, 2022 210 265 63 214 238 5 354 279 071 of which internally generated 127 512 127 512Additions (internally generated) 37 068 37 068Additions 82 629 82 629Government grants -4 750 -4 750Acquisition cost December 31, 2022 325 212 63 214 238 5 354 394 018 of which internally generated 159 830 159 830Additions (internally generated) 39 406 39 406Additions 1 095 1 095Translation differences 3 741Disposal -20 166 -20 166Government grants -4 750 -4 750Acquisition cost December 31, 2023 344 538 63 214 238 5 354 409 603 of which internally generated 194 487 194 487

Note 12 - Intangible assets

(NOK 1,000)

76Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

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 employee cost within software and product

development, operations and support for 2023 which is not capitalized is NOK 143.5 million (2022: NOK 165,43 million).

The Group has received government grants related to development of software of NOK 4,75 million in 2022 and NOK 4,75

million in 2023. The grants have been subtracted from the carrying amount of internally generated software.

Customer Re-aquired Software contracts Patents rights Total Accumulated amortisation andimpairment losses January 1, 2022 107 528 27 030 238 5 354 140 151 of which internally generated 52 595 52 595Amortisation of internally generated assets 35 732 35 732Amortisation of other assets 23 582 15 947 39 529Impairment -377 -377Accumulated amortisation andimpairment losses December 31, 2022 166 842 42 600 238 5 354 215 034 of which internally generated 88 327 88 327Amortisation of internally generated assets 31 235 31 235Amortisation of other assets 43 855 15 554 59 410Translation differences 1 938 1 938Disposal -19 790 -19 790Accumulated amortisation andimpairment losses December 31, 2023 224 081 58 154 238 5 354 287 827 of which internally generated 119 562 119 562Carrying value as at January 1, 2022 102 737 36 184 138 921 of which internally generated 74 917 74 917Carrying value as at December 31, 2022 157 993 20 614 178 606 of which internally generated 71 503 71 503Carrying value as at December 31, 2023 120 457 5 060 125 516 of which internally generatedEstimated useful life and amortisation plan is as follows:Useful life5 years 5 years 5 years 1 yearAmortisation planstraight-line straight-line straight-line straight-line

77Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

Note 13 - Trade and other receivables

(NOK 1,000)

Note 14 - Other current assets

(NOK 1,000)

12/31/2023 12/31/2022

Trade receivables 181 829 195 764Provisions for bad debt -4 593 -5 413Public taxes and funds 6 383 7 353Other current receivables 96 1 022Total current trade and other receivables 183 716 198 727Deposits 2 252 1 680

Total non-current trade and other receivables 2 252 1 680

Aging of trade receivables

12/31/2023 12/31/2022

Current

138 409 131 610

1-30 days past due 27 565 28 793

31-60 days past due 4 723 11 169

61-90 days past due 1 383 9 477

More than 90 days past due 9 750 14 716

Less provision for bad debt -4 593 -5 413

Total 177 236 190 351

Movements in the provision for impairment of trade receivables2023 2022Opening balance provision for bad debt as at January 1 5 413 4 684Change in provision for the year 1 412 6 083Receivables written off during the year -2 246 -5 479Translation differences 14 125Closing balance provision for bad debt as at December 31 4 593 5 413

12/31/2023 12/31/2022Other prepayments 18 996 23 326Other current assets 4 721Total 23 716 23 326

78Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

Note 15 - Cash and cash equivalents

(NOK 1,000)

Note 16 - Share capital, shareholder information and dividend

(NOK 1,000)

12/31/2023 12/31/2022Bank deposits 522 692 419 306Total cash and cash equivalents 522 692 419 306

Restricted cash

These deposits are subject to regulatory restrictions and are therefore not available for general use.

12/31/2023 12/31/2022Taxes withheld 6 515 9 119Total restricted cash 6 515 9 119

As of December 31, 2023, NOK 4,815 is held as a bank guarantee at DNB bank for the lease contract with Mustad Eiendom

AS regarding rental of offices in Lysaker.

The Parent Company’s registered share capital as at December 31, 2023 was NOK 1,566 thousand, 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 2,842,867 making the presented share capital NOK 1,524 thousand.

The Parent Company’s registered share capital as at December 31, 2022 was NOK 1,566 thousand 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 held treasury

shares of 3,032,968 making the presented share capital NOK 1,521 thousand.

Development in the number of issued and outstanding shares

Number of shares Share capital (1,000)(1,000)Outstanding at January 1, 2023 104 430 1 566Outstanding at December 31, 2023 104 430 1 566

Treasury shares

Number of shares (1,000)Outstanding at January 1, 2023 3 033Employee share scheme issue -190Outstanding at December 31, 2023 2 843

79Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

Ownership structure

The 20 largest shareholders as of December 31, 2023:

Shares Ownership

HOLMEN SPESIALFOND

10 220 040 9.79%

T.D. VEEN AS 6 146 946 5.89%

BJØBERG EIENDOM AS 4 025 775 3.86%

PEXIP HOLDING ASA 2 842 867 2.72%

VERDIPAPIRFONDET DNB SMB 2 177 220 2.08%

VEEN EIENDOM AS 2 133 496 2.04%

STAVANGER VENTURE AS 2 061 063 1.97%

A HOLDINGS AS 2 010 000 1.92%

SYNESI AS 2 000 000 1.92%

XFILE AS 1 850 000 1.77%

Avanza Bank AB 1 842 946 1.76%

J.P. MORGAN SECURITIES PLC 1 764 958 1.69%

Skandinaviska Enskilda Banken AB 1 681 000 1.61%

GILES CHAMBERLIN 1 516 101 1.45%

The Bank of New York Mellon SA/NV 1 492 827 1.43%

CARABACEL AS 1 413 064 1.35%

LIA INVESTMENTS LIMITED 1 351 252 1.29%

SIRIUS AS 1 240 000 1.19%

PEBRIGA AS 1 157 730 1.11%

Tamorer ltd ATF Wylie Family Trust

1 118 748 1.07%

Total top 20 shareholders

50 046 033 47.92%

Others

54 383 638 52.08%

Total

104 429 671 100%

Number of shares owned or controlled directly or indirectly by the Management Group and Board of Directors at December

31, 2023:

Persons discharging managerial responsibilities

Shares Ownership

Kjell Skappel (Chair of the Board)

10 341 505 9.90%

Irene Kristiansen(Board Member) 150 000 0.14%

Geir Olsen (Board Member) 978 312 0.94%

Phillip Lester Austern (Board Member) 100 000 0.10%

Silvija Seres (Board Member)

0 0.00%

Trond Johannessen (CEO)

115 000 0.11%

Ian Mortimer (CTO) 54 667 0.05%

Patricia Auseth (CMO) 17 210 0.02%

Åsmund Fodstad (CRO) 797 275 0.76%

Ingrid Woodhouse (CPO) 45 280 0.04%

Øystein Hem (CFO) 140 968 0.13%

Helge Hansen (CPO)

4000 0.00%

Total 12 744 217 12.20%

Dividend paid and proposed

Proposal for approval at AGM for financial year 2023 is that NOK 1.1 per share is paid as a dividend.

80Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

Note 18 - Contract costs, contract assets and contract liabilities

(NOK 1,000)

Note 17 - Borrowings

(NOK 1,000)

Interest rate Year of maturity 12/31/2023 12/31/2022Loan from Innovasjon Norge3.70% 2024Other borrowings 2.0% 2026 2 190 16Total long-term debt 2 190 16Loan from Innovasjon Norge 3.70% 2023 4 000Other borrowings 132 77Total short-term debt 132 4 077

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 and were fully down paid in 2023. The Group did not have

any assets pledged as collateral as of year ending 2023. The carrying amount of assets pledged as collateral in 2022 was

NOK 219.4 million

Contract assets

2023 2022

Balance at January 1

37 233 17 431

Additions 39 210 37 252

Reclassifications to accounts recievables

-37 233 -17 450

Balance at December 31

39 211 37 233

Contract assets represent recognized revenue that has not yet been invoiced, and are presented as other current assets.

Refer to note 14.

Contract liabilities2023 2022Balance at January 1 231 004 202 302New contract liabilities 220 344 203 747Revenue recognised from liability opening balance-196 091 -175 045Balance at December 31 255 258 231 004

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 2023 or 2022.

81Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

Contract costs2023 2022Balance at January 1 285 778 262 076Additions 86 860 74 581Depreciated during the year -83 944 -69 583Translation differences10 307 18 705Balance at December 31 299 000 285 778

Contract assets and liabilities

Of the contract liabilities as of December 31, 2022, NOK million 196 has been recognized as revenue in 2023

(2022: NOK million 175) corresponding to 85% (2022: 87%) of the contract liability the preceding year end. The increase of

the contract liability in 2022 and 2023 is mainly due to increase in sales.

Of the contract assets as of December 31, 2023, NOK million 37 is reclassified to accounts receivables in 2023

(2022: NOK million 17.5). The increase in contract asset to NOK million 39 in 2023 (2022: NOK million 37) 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 2023, amortization of contract costs amounting to NOK million 82 was recognized as part of salary and personnel

expenses and NOK million 2 as cost of sale. For 2022 the amounts were NOK million 67.5 and NOK million 2 respectively.

Note 19 - Categories of financial assets and financial liabilities

(NOK 1,000)

Financial assets12/31/2023 12/31/2022Financial assets at amortised cost:Cash & cash equivalents (note 15) 522 692 419 306Trade and other receivables (note 13) 183 716 198 727Total 706 407 618 033

Financial liabilities12/31/2023 12/31/2022Liabilities at amortised cost:Borrowings (note 17) 2 323 4 093Trade and other payables 130 374 119 665Lease liabilities (note 10) 47 495 83 999Total 180 192 207 757

Non-financial assets and liabilities are excluded from the

table.

82Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

Note 20 - Reconciliation for liabilities arising from financing activities

(NOK 1,000)

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.

Liabilities from financing activitiesBorrowings Lease liabilities Total(Note 17)(Note 10)Net debt as of January 1, 2022 6 000 113 527 119 527Financing cash flows -1 907 -27 399 -29 306New leases/lease modifications -3 657 -3 657Foreign exchange adjustments 1 529 1 529Other changes- Interest expense -900 -3 106 -4 006- Interest payments 900 3 106 4 006Net debt as of December 31, 2022 4 093 83 999 88 092Financing cash flows -4 000 -21 737 -25 737New leases/lease modifications -15 244 -15 244Foreign exchange adjustments 543 477 1 021Other changes- Interest expense-484 -2 020 -2 505- Interest payments 484 2 020 2 505Transfer between accounts* 1 686 1 686Net debt as December 31, 2023 2 323 47 495 49 818

Net debt

Liabilities from financing activities 88 092Cash/Bank overdraft 419 306Net debt as of December 31, 2022 -331 213Liabilities from financing activities 49 314Cash/Bank overdraft 522 692Net debt as of December 31, 2023 -473 378

The group does not have any financial investments with cash flows included in fianancial activities in the cash flow.

* This amount was in 2022 presented as other provisions and was reclassified to borrowings in 2023

83Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

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 provided information about the exposure to credit risk and expected credit losses for trade receivables

and contract assets as of December 31 in 2023 and 2022:

For the year ended December 31, 2023

1-30 days 31-60 days 61-90 days More than 90 Trade receivables and contract assets Current past duepast duepast duedays past dueLoss rate 1.35% 1.80% 2.25% 3.00% 8.74%

For the year ended December 31, 2022

1-30 days 31-60 days 61-90 days past More than 90 Trade receivables and contract assets Current past duepast dueduedays past dueLoss rate 1.35% 1.80% 2.25% 3.00% 8.74%

The Group has historically had limited losses on receivables. However, the Group has considered the uncertainty in the

market and the time value of money from later payments.

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.

84Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

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 recognized 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.

The carrying NOK amounts of the Group’s financial assets and liabilities at the reporting date are as follows (in 1,000 NOK):

Financial assets2023 % of total 2022 % of totalNOK 269 928 38.2 % 255 239 41.3 %USD 358 313 50.7 % 233 553 37.8 %GBP 45 654 6.5 % 60 474 9.8 %Other currencies 32 512 4.6 % 68 766 11.1 %Total 706 407 100% 618 033 100%

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 smaller loan in Pexip Belgium 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, 2023

Current Non-current1-6 months 6-12 months 1-2 years 2-5 years Later than 5 (NOK 1,000)yearsBorrowings 132 2 190Trade and other payables 130 119Total liabilities 130 251 2 190

For the year ended December 31, 2022

Current Non-current1-6 months 6-12 months 1-2 years 2-5 years Later than 5 (NOK 1,000)yearsBorrowings 1 074 1 055 2 050Trade and other payables 119 665Total liabilities 120 740 1 055 2 050

85Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

Financial liabilities2023 % of total 2022 % of totalNOK 83 596 46.5 % 124 064 59.7 %USD 18 263 10.1 % 19 140 9.2 %GBP 16 954 9.4 % 27 228 13.1 %Other currencies 61 379 34.0 % 37 326 18.0 %Total 180 192 100% 207 757 100%

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:

2023 2023 2022 2022Foreign Effect on profit before Effect on Equity Effect on profit before Effect on Equity currencytax (in NOK 1,000)(in NOK 1,000)tax (in NOK 1,000)(in NOK 1,000)USD 23 803 18 567 15 009 13 100 GBP 2 009 1 567 2 327 2 031

Note 22 - Capital management

(NOK 1,000)

Note 23 - Pensions and other long-term employee benefits

(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.

The Group has a international cash pool to improve the capital management and optimize liquidity management across

entities.

In 2023, the Group established a dividend policy where it aims to distribute 50-100% of the free cash flow generated in the

previous calendar year as a dividend. In addition, the Board of Directors has recommended a extraordinary dividend of NOK

0.5 per share recognizing that the Group has excess liquidity. The total dividend which is proposed for the Annual General

Meeting is NOK 1.1 per share excluding shares held by Pexip Holding ASA, for a total of NOK 111.75 million, and will be

distributed in Q2 2024 pending shareholder approval.

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.

86Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

The group also provides standard life insurance, health insurance and travel insurance to its employees, the terms of which

vary across the countries the group operates in.

Long-term employee benefits comprise loans to employees (refer to note 4) and share-based payments (refer to note 24).

2023 2022Pension cost 38 875 45 639

Note 24 - Share-based payments

Pexip has two share-based compensation programs offered to employees: stock options and restricted stock units

(RSUs). In 2023, Pexip provided a new grant of options to key employees, as well as a new grant to management. The

options granted to key employees vest with 1/3 in December 2024, 1/3 in December 2025 and 1/3 in December 2026.

The options granted to management vest on the same schedule. The only vesting criteria is continued employment and

all unvested options will be forfeited when the employee terminates the employment contract with Pexip. 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.

For RSUs granted in 2023, 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.

Options2023 2023 2022 2022Weighted average Weighted average exercise price Numberexercise price NumberOutstanding at January 1 26,14 5 252 950 54,81 5 131 938 Granted during the year 19,65 2 285 000 17,28 3 940 000Converted during the year -10 000 N/A -2 012 725Forfeited during the year 28,04 -860 000 38,32 -1 784 188Exercised during the year 14,50 -7 500 14,50 -16 200Expired during the year 14,50 -5 875Outstanding at December 31 23,63 6 660 450 26,14 5 252 950

RSUs2023 2023 2022 2022Number NumberOutstanding at January 1 1 234 532 93 780Granted during the year 1 310 000 973 725Converted 4 000 811 490Forfeited during the year -287 195 -644 463Adjusted 4 500Exercised during the year -193 912Expired during the year -1 600Outstanding at December 31 2 070 325 1 234 532

87Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

The exercise price of options outstanding at December 31, 2023 ranged beetween NOK 14,5 and NOK 100 (2022: NOK

14,5 and NOK 100) and their weighted average contractual life was 2.85 years (2022: 3.1 years). Weighted average

contractual life for RSUs outstanding at December 31, 2023 was 1.97 years (2022: 1.99 years).

Of the total number of options outstanding at December 31, 2023 1 333 225 (2022: 1 131 175) had vested and were

excercisable (Weighted average exercise price of NOK 36.40). No RSUs were vested at December 31, 2023.

The weighted average fair value of each option granted during the year was NOK 6.86 (2022: NOK 4.69). The weighted

average fair value of each RSU granted during the year was NOK 13.02 (2022: NOK 31.57).

The total expense recognised for the period arising from equity-settled share-based payment transactions was NOK 36.4

million (2022: NOK 25.1 million).

The following information is relevant in the determination of the fair value of instruments granted during the year.

Options2023 2022Option pricing model usedBlack-Scholes/Monte Carlo Black ScholesWeighted average share price at grant date (in NOK) 20 16Excercise price (in NOK) 20 17Weighted average expected life (in days) 1 230 1 675Expected volatility 38.19% 41.69%Risk-free interest rate 3.91% 2.57%

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 2023 2022Weighted average share price at grant date (in NOK) 13 37Weighted average expected life (in days) 1 095 986

Note 25 - Government grants

(NOK 1,000)

The Group is eligible for government grants of NOK 5.9 million in 2023 (2022: NOK 7.3 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 1.1 million has been deducted from salary cost for the R&D department in Pexip Ltd.

In 2023 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 in 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.

88Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

Note 26 - List of subsidiaries

The consolidated financial statements for 2023 include the following subsidiaries:

CompanyRegistered office Voting share Ownership sharePexip ASOslo, 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%Pexip Italy S.R.L. Milan, Italy 100% 100%Pexip Spain SL Madrid, Spain 100% 100%

The consolidated financial statements for 2022 include the following subsidiaries:

CompanyRegistered office Voting share Ownership sharePexip ASOslo, 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%

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.

89Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

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, 2023.

Note 29 - Restructuring costs

The restructuring costs from the reorganization undertaken in 2023 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 8,1 million.

2023 2022 Total restructuring 8 073 61 290

90Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

Financials Statements

Pexip Holding ASA 2023

91Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

Profit and Loss Statement

Notes Full Year

(NOK 1.000) FY 2023 FY 2022

Operating expenses 2,3 18 397 20 314

Depreciation and amortization 404 000

Operating profit or loss -18 397 -424 314

Financial income 4 26 816 21 699

Financial expenses 4 -0 -359

Net gain and loss on foreign exchange differences 4 940 25 734

Financial income/(expenses) - net 31 756 47 074

Profit or loss before income tax 13 359 -377 240

Income tax expense 5 2 939 5 887

Profit or loss for the year 10 420 -383 126

Profit or loss is attributable to:

Owners of Pexip Holding ASA 10 420 -383 126

Allocation of net profit and equity transfers

Dividends to shareholders 10 -111 745

Transfers from equity -101 326 -383 126

Total allocations and equity transfers -101 326 -383 126

92Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

Consolidated Statement of Financial Position

(NOK 1.000) Notes 12/31/2023 12/31/2022

ASSETS

Non-current assets

Deferred tax 5 32 969 35 908

Investments in group companies 6 1 090 038 1 059 223

Receivables from Group company 7 275 284 250 533

Total non-current assets 1 398 292 1 345 664

Current assets receivables

Other current assets 1 041 1 055

Receivables from Group company 7 19 425 20 428

Cash and cash equivalents 503 255 399 074

Total current assets 523 721 420 559

TOTAL ASSETS

1 922 013 1 766 221

(NOK 1.000) 12/31/2023 12/31/2022

SHAREHOLDERS EQUITY AND LIABILITIES

Shareholders equity

Paid-in equity

Share capital 8,10 1 524 1 521

Share premium 8,9 2 115 938 2 115 938

Total paid-in equity 2 117 462 2 117 460

Equity

Other equity

8 -628 608 -558 203

Total other equity -628 608 -558 203

Total shareholders equity 1 488 854 1 559 256

Liabilities

Current liabilities

Trade and other payables -68 417

Debt to group Company 7 321 482 206 548

Dividends 10 111 745

Total current liabilities 433 159 206 965

Total liabilities 433 159 206 965

TOTAL EQUITY AND LIABILITIES 1 922 013 1 766 221

93Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023

Board of Directors

SIGNATURE PAGE

Oslo, March 20, 2024

Board of Directors and CEO of Pexip Holding ASA

Kjell Skappel

Chair of the Board

Trond K. Johannessen

CEO

Irene Kristiansen

Board Member

Phillip Austern

Board Member

Silvija Seres

Board Member

Geir Langfeldt Olsen

Board Member

Financials

94Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023

Consolidated statement of cash flows

(NOK 1,000) FY 2023 FY 2022

Cash flow from operating activities

Profit or loss before income tax 13 359 -377 240

Adjustments for

Depreciation, amortization and net impairment losses 404 000

Interest income/expenses - net 4 742

Net exchange differences -4 908 -4 383

Financial income/(expenes) - net -26 816 -25 734

Other adjustments

Change in operating assets and liabilities

Change in trade payables 14 -675

Changes in intercompany balances 8 719 179 931

Changes in other current assets and other liabilities -11 006 92

Interest received 26 816

Net cash inflow/outflow from operating activities 6 178 180 733

Cash flow from investing activities

Cash out from loan to related parties -24 752 -354 413

Cash in from intercompany borrowings 117 738

Net cash inflow/outflow from investing activities 92 986 -354 413

Cash flow from financing activities

Proceeds from sale of treasury shares 109

Purchase of treasury shares -87 674

Interest paid -359

Net cash inflow/outflow from financing activities 109 -88 033

Effects of currency rate changes on bank deposits, cash and equivalents 25 734

Net increase/(decrease) in cash and cash equivalents 99 273 -235 979

Cash and cash equivalents start of the period 399 074 635 053

Effects of exchange rate changes on cash and cash equivalents 4 908

Cash and cash equivalents end of the period 503 255 399 074

Financials

95Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023

Note 1 - Accounting policies

Pexip Holding ASA

Notes to the accounts, year ended 31 December 2023

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.

Currency forward contracts are valued in the balance sheet at fair value on 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.

Financials

96Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023

Note 2 - Payroll costs, number of employees, benefits,

loans to employees etc.

(NOK 1,000)

Note 3 - Operating expenses

(NOK 1,000)

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 2023.

Remuneration to board of directors in the parent company

The remuneration to board of directors is disclosed in the management remuneration report

for 2023.

Auditor

Remuneration to Deloitte AS and their associates is as follows:

2023 2022

Statutory audit 2 802 2 535

Amounts are excl. of VAT

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.

Income taxes

Tax expenses are matched with operating income before tax. Tax related to equity transactions e.g. group contribution, is

recognized 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.

Dividends

Dividends proposed in the annual statement is recognized as a liability in the balance sheet of Pexip Holding AS at balance

ending date.

Other operating expenses 2023 2022

Operating expenses 9 831 10 743

Audit fees 2 802 2 535

Other professional fees 947 2 085

Other operating costs 4 817 4 950

Total 18 397 20 314

Financials

97Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023

Note 4 - Financial Income and expenses

(NOK 1,000)

Note 5 - Income tax expense

(NOK 1,000)

2023 2022

Interest income 7 390 6 983

Exchange gains 4 940 25 734

Other financial income -1

Interest income from Group company 19 425 16 957

Financial income 31 756 49 673

Interest expense -2 600

Financial expenses -2 600

Net financial income (expense) 31 756 47 074

Of the Exchange gains and losses as of December 31 2023, NOK 4,940 thousand are related to currency changes

(AUD, DKK, EUR, GBP, SEK, SGD, USD) for the bank accounts.

Specification of income tax expense: 2023 2022

Current income tax payable

Changes in deferred tax 2 939 5 887

Tax on profit/(loss) 2 939 5 887

Allocation of income tax expense between Norway 2023 2022

Tax on profit/(loss) 2 939 5 887

Reconciliation from nominal to real income tax rate:

2023 2022

Profit/(loss) before taxation 13 359 -377 240

Estimated income tax according to nominal tax rate (22%) 2 939 -82 993

Tax effect of non deductible expenses 88 880

Income tax expense 2 939 5 887

Effective income tax rate 22% -2%

Financials

98Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

Specification for the tax effect of temporary differences and losses carried forward Asset Asset

Tax losses 32 969 35 908

Total 32 969 35 908

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 6 - Investments in subsidiaries and associated companies

(NOK 1,000)

Note 7 - Related party transactions and balances

(NOK 1,000)

Date of acquisition Registered office Voting share Ownership share Company

Pexip AS 10/22/2018 Lysaker, Norway 100% 100%

Equity latest financial

statements

Profit/loss latest

financial statements Company

Pexip AS 35 091 -242 491

Related party transactions, profit and loss

Related party balance items

Relationship to

the counterpart

Intercompany

borrowings 2023

Intercompany

borrowings 2022Counterpart

Pexip AS Subsidiary 321 482 206 548

Total 321 482 206 548

Relationship to

the counterpart

Intercompany

receivables 2023

Intercompany

receivables 2022

Counterpart

Pexip AS Subsidiary 294 710 270 961

Total 294 710 270 961

Intercompany borrowings amounted to NOK 321,482 thousand and intercompany receivables to NOK 294,710 thousand.

Of the total cash of NOK 503,255 thousand, 311,150 thousand is related to the established cash pool for the Pexip Group.

Total cash amount within the cash pool for the Group per year end 2023 is booked in Pexip Holding ASA as the legal owner

of the cash.

99Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

Note 8 - Equity

(NOK 1,000)

Note 9 - Share-based payments

capital

premium

Other

reserves

Retained

earnings

Total

equity(NOK 1,000)

Balance at January 1, 2022 1 556 2 115 938 -15 411 -99 181 2 002 902

Profit or loss for the year -383 126 -383 126

Other comprehensive income for the year

Total comprehensive income for the year -383 126 -383 126

Capital increase/share issue

By/sell treasury share -35 -87 404 -87 439

Share-based payments 26 920 26 920

Balance at December 31, 2022 1 521 2 115 938 -75 895 -482 307 1 559 257

Balance at January 1, 2023 1 521 2 115 938 -75 895 -482 307 1 559 257

Profit or loss for the period 10 420 10 420

Other comprehensive income for the year

Total comprehensive income for the year 10 420 10 420

Dividend to shareholders -111 745 -111 745

By/sell treasury share 3 106 109

Share-based payments 30 815 30 815

Balance at December 31, 2023 1 524 2 004 193 -44 974 -471 887 1 488 855

Pexip has two share-based compensation programs offered to employees: stock options and restricted stock units

(RSUs). In 2023, Pexip provided a new grant of options to key employees, as well as a new grant to management. The

options granted to kep employees vest with 1/3 in December 2024, 1/3 in December 2025 and 1/3 in December 2026.

The options granted to management vest on the same schehdule. The only vesting criteria is continued employment and

all unvested options will be forfeited when the employee terminates the employment contarct with Pexip. 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.

For RSUs granted in 2023, 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.

100Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

Options 2023 2023 2022 2022

Weighted average

exercise price Number

Weighted average

exercise price Number

Outstanding at January 1 26,14 5 252 950 54,81 5 131 938

Granted during the year 19,65 2 285 000 17,28 3 940 000

Converted during the year -10 000 N/A -2 012 725

Forfeited during the year 28,04 -860 000 38,32 -1 784 188

Exercised during the year 14,50 -7 500 14,50 -16 200

Expired during the year 14,50 -5 875

Outstanding at December 31 23,63 6 660 450 26,14 5 252 950

RSUs 2023 2023 2022 2022

Number Number

Outstanding at January 1 1 234 532 93 780

Granted during the year 1 310 000 973 725

Converted 4 000 811 490

Forfeited during the year -287 195 -644 463

Adjusted 4 500

Exercised during the year -193 912

Expired during the year -1 600

Outstanding at December 31 2 070 325 1 234 532

The exercise price of options outstanding at December 31, 2023 ranged beetween NOK 14,5 and NOK 100 (2022: NOK 14,5

and NOK 100) and their weighted average contractual life was 2.85 years (2022: 3,1 years). Weighted average contractual

life for RSUs outstanding at December 31, 2023 was 1,97 years (2022: 1.99 years).

Of the total number of options outstanding at December 31, 2023 1 333 225 (2022: 1 131 175) had vested and were

excercisable (Weighted average exercise price of NOK 36.40). No RSUs were vested at December 31, 2023.

The weighted average fair value of each option granted during the year was NOK 6,86 (2022: NOK 4,69). The weighted

average fair value of each RSU granted during the year was NOK 13.02 (2022: NOK 31,57).

The total expense recognised for the period arising from equity-settled share-based payment transactions was NOK 36,4

million (2022: NOK 25,1 million).

The following information is relevant in the determination of the fair value of instruments granted during the year.

Options 2023 2022

Option pricing model used Black-Scholes/

Monte Carlo

Black-Scholes

Weighted average share price at grant date (in NOK) 20 16

Excercise price (in NOK) 20 17

Weighted average expected life (in days) 1 230 1 675

Expected volatility 38.19% 41.69%

Risk-free interest rate 3.91% 2.7%

101Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

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 2023 2022

Weighted average share price at grant date (in NOK) 13 37

Weighted average expected life (in days) 1 095 986

Note 10 - Share capital, shareholder information and dividend

(NOK 1,000)

The Parent Company’s registered share capital as at December 31, 2023 was NOK 1,566 thousand, 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 2,842,867 making the presented share capital NOK 1,524 thousand.

The Parent Company’s registered share capital as at December 31, 2022 was NOK 1,566 thousand 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

held treasury shares of 3,032,968 making the presented share capital NOK 1,521 thousand.

Development in the number of issued and outstanding shares

Number of

shares (1,000)

Share capital

(1,000)

Outstanding at January 1, 2023 104 430 1 566

Outstanding at December 31, 2023 104 430 1 566

Treasury shares

Number of shares (1,000)

Outstanding at January 1, 2023 3 032 968

Shares bought back on-market -

Employee share scheme issue -190 101

Outstanding at December 31, 2023 2 842 867

Ownership structure

The 20 largest shareholders as of December 31, 2023:

Shares Ownership

HOLMEN SPESIALFOND 10 220 040 9.79%

T.D. VEEN AS 6 146 946 5.89%

BJØBERG EIENDOM AS 4 025 775 3.86%

PEXIP HOLDING ASA 2 842 867 2.72%

102Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

Shares Ownership

VERDIPAPIRFONDET DNB SMB 2 177 220 2.08%

VEEN EIENDOM AS 2 133 496 2.04%

STAVANGER VENTURE AS 2 061 063 1.97%

A HOLDINGS AS 2 010 000 1.92%

SYNESI AS 2 000 000 1.92%

XFILE AS 1 850 000 1.77%

Avanza Bank AB 1 842 946 1.76%

J.P. MORGAN SECURITIES PLC 1 764 958 1.69%

Skandinaviska Enskilda Banken AB 1 681 000 1.61%

GILES CHAMBERLIN 1 516 101 1.45%

The Bank of New York Mellon SA/NV 1 492 827 1.43%

CARABACEL AS 1 413 064 1.35%

LIA INVESTMENTS LIMITED 1 351 252 1.29%

SIRIUS AS 1 240 000 1.19%

PEBRIGA AS 1 157 730 1.11%

Tamorer ltd ATF Wylie Family Trust 1 118 748 1.07%

Total top 20 shareholders 50 046 033 47.92%

Others 54 383 638 52.08%

Total 104 429 671 100%

Number of shares owned or controlled directly or indirectly by the Management Group and Board of Directors at December

31, 2023:

Persons discharging managerial responsibilities Shares Ownership

Kjell Skappel (Chair of the Board) 10 341 505 9.90%

Irene Kristiansen(Board Member) 150 000 0.14%

Geir Olsen (Board Member) 978 312 0.94%

Phillip Lester Austern (Board Member) 100 000 0.10%

Silvija Seres (Board Member) 0 0.00%

Trond Johannessen (CEO) 115 000 0.11%

Ian Mortimer (CTO) 54 667 0.05%

Patricia Auseth (CMO) 17 210 0.02%

Åsmund Fodstad (CRO) 797 275 0.76%

Ingrid Woodhouse (CPO) 45 280 0.04%

Øystein Hem (CFO) 140 968 0.13%

Helge Hansen (CPO) 4000 0.00%

Total 12 744 217 12.20%

Dividend paid and proposed

Proposal for approval at AGM for financial year 2023 is that NOK 1.1 per share is paid as a dividend.

Note 11 - Events after the balance sheet date

No events that have significantly affected or may significantly affect the operations of the Company have

occurred after December 31, 2023.

103Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023

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, 2023, 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 20, 2024

Board of Directors and CEO of Pexip Holding ASA

Kjell Skappel

Chair of the Board

Trond K. Johannessen

CEO

Irene Kristiansen

Board Member

Phillip Austern

Board Member

Silvija Seres

Board Member

Geir Langfeldt Olsen

Board Member

Financials

104Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

Auditor’s

Report

105Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

Deloitte AS

Dronning Eufemias gate 14

Postboks 221

-0103 Oslo

Norway

+47 23 27 90 00

www.deloitte.no

Deloitte AS and Deloitte Advokatfirma AS are the Norwegian affiliates of Deloitte NSE LLP, a member firm of Deloitte Touche Tohmatsu Limited ("DTTL"), its

network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent e

ntities. DTTL (also referred

to as "Deloitte Global") does not provide services to clients. Please see www.deloitte.no for a more detailed description of

DTTL and its member firms.

Deloitte Norway conducts business through two legally separate and independent limited

liability companies; Deloitte AS, providing audit, consulting,

financial advisory and risk management services, and Deloitte Advokatfirma AS, providing tax and legal services.

Registrert i Foretaksregisteret

Medlemmer av Den norske

Revisorforening

Organisasjonsnummer: 980 211 282

To the General Meeting of Pexip Holding ASA

INDEPENDENT AUDITOR’S REPORT

Reeppoorrtt oonn tthhee AAuuddiitt ooff tthhee FFiinnaanncciiaall SSttaatteemmeennttss

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 2023, the income statement and statement of cash flows for the year

then ended, and notes to the financial statements, including a summary of significant accounting policies.

• The consolidated financial statements of Pexip Holding ASA and its subsidiaries (the Group), which comprise

the balance sheet as at 31 December 2023, statement of profit and 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 material accounting policy information.

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 2023, 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 2023, and its financial performance and its cash flows for the year then ended in accordance

with IFRS Accounting 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 4 years since the company was listed, including the

listing year.

106Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

Page 2

Independent auditor’s report

Pexip Holding ASA

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 2023. 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.

Carrying amount of goodwill

As disclosed in note 2.4 and 11, the Group has recognized

goodwill of NOK 598 998 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 Directors’ report applies correspondingly to the statement on Corporate Social

Responsibility and to the report on payments to governments.

107Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

Page 3

Independent auditor’s report

Pexip Holding ASA

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation of financial statements of the Company 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 of the consolidated financial statements of the Group that give a true and fair view

in accordance with IFRS Accounting Standards as adopted by the EU. Management is responsible 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.

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. The financial

statements of the Company use the going concern basis of accounting insofar as it is not likely that the enterprise

will cease operations. The financial statements of the Group use 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’s 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.

108Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

Page 4

Independent auditor’s report

Pexip Holding ASA

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.

Reeppoorrtt 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-2023-12-31-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, 20 March 2024

Deloitte AS

TToorrggeeiirr DDaahhllee

State Authorised Public Accountant

This document is electronically signed

109Highlights About Pexip Statement from the BoD Corporate Governance Annual Report 2023Financials

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.

Free cash flow: The sum of operating cash flow, investing cash flow and principal lease payments. This

represents the free cash flow from the business, excluding potential equity or debt financing cash flows as well

as potential cash flows related to company acquisitions/divestitures.

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.

110Highlights About Pexip Statement from the BoD Corporate Governance Financials Annual Report 2023

Lilleakerveien 2A, 0283 Oslo, Norway