Q4 Summary
Pexip’s subscription base measured in Annual Recurring Revenue (ARR) amounted to USD 102.8 million in Q4 2023, representing a year-on-year increase of 3% from USD 99.6 million in Q4 2022. Pexip grew its overall ARR base with USD 3.0 million from Q3 2023.
Connected spaces ARR amounted to USD 63.1 million at the end of Q4 2023, up 3% from Q4 2022. The net revenue retention rate, reflecting the percentage of retained revenue from existing customers, was 98% in Q4 2023 excluding legacy areas. Secure and Custom ARR amounted to USD 36.3 million at the end of Q4 2023, up 13% from Q4 2022. The net revenue retention rate was 99% in Q4 2023 due to lower upsell compared to previous quarters. ARR from Pexip as-a-Service was at USD 48.8 million in Q4 2023, up 5% year-on-year, while ARR from Pexip’s Self-hosted Software ended at USD 53.9 million, up 1% year-on-year.
Pexip has delivered on the financial targets for 2023. The Company delivered 3% growth in ARR against the target of flat to positive development in ARR. On EBITDA the Company delivered NOK 113 million adjusted for other gains and losses against a target of NOK 100-150 million. Lastly, the company delivered NOK 105 million in free cash flow against an updated target of NOK 85-100 million (original target of NOK 40-60 million).
Our secure solutions are increasingly relevant and awareness around sovereignty and privacy for Government data is increasing, with more countries issuing specific recommendations and regulations. Within interoperability and infrastructure solutions, we continue to capture new accounts, and saw quarter-on-quarter growth in this segment in Q4. The development in the strategic partnerships with both Microsoft and Poly continues to show that Pexip’s focused approach to our key markets makes us an attractive partner in our industry.
Pexip announced a new cash distribution policy in November 2023. In line with this policy, the Board of Directors will recommend to the Annual General Meeting a dividend of NOK 1.1 per share, consisting of an ordinary dividend of 0.6 NOK per share and an extraordinary dividend of NOK 0.5 per share.