2023
Annual Report
2Highlights About Pexip Statement from the BoD Corporate Governance Financials Annual Report 2023
Table of
Contents
About Pexip
9
Highlights
3
Key figures
3
Letter from the CEO
5
Pexip as an investment
8
Board of Directors49
Statement from the
Board of Directors
27
Statement of Corporate
Governance (NUES)
38
Financials
50
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
76
113
56
-124
EBITDA adjusted (MNOK)
-184
20222019 2020 2021
182
361
329
304
535
Employees
100
994
103
2019 2020 2021 2022 2023
47
82
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
12
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
Share
capital
Share
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
2)
2)
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
1)
Europe, Middle East and Africa
2)
Asia Pacific (East and South Asia, Southeast Asia and Oceania)
Information about major customers
The Group conducts its sales through channel partners. Of the Group’s total channel partner base per 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
Share
capital
Share
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
NO
-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
R
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
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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.
R
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
www.pexip.com
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