Pexip’s Q1 2020 Earnings Seem to Indicate It’s COVID-19-Proof
The video communications provider, Pexip, today announced a record 50% year-on-year growth in contracted annual recurring revenue (ARR) after the first quarter of 2020, further enhancing the recently reported growth of 32% in 2019. Q1 2020 finished with a significant increase in delta annual recurring revenue (DARR) of 9.5MUSD, giving a total contracted annual recurring revenue (ARR) of 56.7 MUSD.
A significant part of the growth comes from increased demand from existing customers. Pexip experienced a Net Retention Rate in Q1 of 113% (based on revenue) for the previous 12 months, up from 99% in Q4 2019.
The company reports that the current COVID-19 situation is further spurring the results and momentum from 2019 as more companies turn to video communication to enable business continuity. Pexip has seen a growth of 7 x peak traffic on its service in the past month alone. This increase in capacity demand comes from a mix of existing users and new customers. In particular, there has been an increased demand from healthcare providers and governments globally who need secure video communication. According to Pexip, the current change in working behavior with more home offices, remote consultations and conferences will continue to drive usage and adoption of video beyond the COVID-19 crisis.
In 2019, Pexip grew in the videoconferencing solution realm. Pexip serves enterprise and public sector customers across the globe, including 15% of the Global Fortune 500. The company currently has over 200 employees in seven offices in 18 countries, spread across three continents. Fifty-five percent of subscription revenue comes from EMEA, 33% from North America and 12% from APAC.
2019 / Q1 2020 Financial Highlights in Summary:
- Total revenue of 370 MNOK, a growth of 32% from 2018
- Earnings of 76 MNOK, up from 32 MNOK in 2018, which corresponds to an EBITDA margin of 21%
- Gross Margin of 95%
- Contracted Annual Recurring Revenue of 47 MUSD, a growth of 11.7 MUSD
- Customer Net retention Rate (% of ARR) of 99%
- Contracted Annual Recurring Revenue of 56.7 MUSD, up 50% from Q1 2019
- Q1 Growth in Annual Recurring Revenue of 9.5 MUSD
- Customer Net Retention Rate of 113% for the previous 12 months, up from 99% in Q4 2019