Q2 2026 Pexip Holding ASA Earnings Call Transcript
Key Points
- Pexip Holding ASA (PXPHF) reported strong ARR growth of 18% year-over-year, reaching $140 million, with Secure and Custom growing 27%.
- EBITDA improved significantly, with a 12-month rolling EBITDA of $40 million, a 60% increase year-over-year, and a margin of 31%.
- The company achieved a Rule of 40 performance of 49%, well above its long-term target of 40%.
- Defense and national security segment is a key growth driver, now representing 15% of total ARR, with major wins including a European Ministry of Defense contract for over 100,000 users.
- Free cash flow for the last 12 months reached $38 million, up from $3 million in Q2 of the prior year, demonstrating strong cash generation.
- The launch of Pexip Connect for MTRs on Android is now publicly available, with first orders booked, expanding the Connected Spaces product portfolio.
- Net retention in Secure and Custom was strong, with existing customers contributing $4 million in net upsell, the best ever in dollar terms for the segment.
- Connected Spaces growth was modest, with only $0.3 million in new ARR, and new sales were below usual levels as large deals were concentrated in Secure and Custom.
- The company's Q3 ARR guidance of $142-145 million implies a slowdown in growth compared to recent quarters, which may concern investors.
- Operating expenses increased, partly due to higher AI-related costs and salary increases, with no immediate significant productivity gains from AI yet.
- The company noted that Q4 2025 had extraordinary large contracts, and they do not expect to repeat such a high growth quarter in Q4 2026.
- The dividend payment of $44 million reduced cash reserves, leaving a cash position of $45 million, which may limit future investment flexibility.
- The company's revenue recognition is becoming more front-loaded due to software sales, which could lead to volatility in quarterly revenue.
- The company's cost of goods sold was unusually low in the prior year, making the incremental revenue-to-bottom-line conversion of 34% appear less impressive.
Good morning, and welcome to this presentation of Pexip's second quarter results. My name is Trond Johannessen, and I'm the CEO. Together with me here at Lysaker, I have Oystein Hem, our CFO; and Asmund Fodstad, our Chief Revenue Officer. Together, we will take you through the highlights of the quarter. The standard disclaimers apply as usual.
First, a brief overview of Pexip for those new to the company. Pexip was founded in 2012, and currently, we operate in 25 countries across the globe. We are a secure video meeting and video infrastructure company, delivering software and Software as a Service. Pexip has unique and established partnerships with the leading companies in our industry. We complement and enhance their solutions and do not generally directly compete with them.
Our customers are mainly large organizations, both in the private and public sector that have specific needs when it comes to interoperability, security and data control. The financial performance has been strong and has been continuously improving
| Access to All Earning Calls and Stock Analysis | |
| 30-Year Financial on one screen | |
| All-in-one Stock Screener with unlimited filters | |
| Customizable Stock Dashboard | |
| Real Time Insider Trading Transactions | |
| 8,000+ Institutional investors’ 13F holdings | |
| Powerful Excel Add-in and Google sheets Add-on | |
| All data downloadable | |
| Quick customer support | |
| And much more... |
Trustpilot
We'd love to learn more about your experiences on GuruFocus.com and how we can improve!
Take Survey
