Pexip Holding ASA

Pexip reported Q4 ARR growth of USD 8.8 million, bringing ARR to USD 131 million at quarter-end. Secure and Custom ARR reached USD 56.3 million, up 25% year over year, while Connected Spaces reached USD 74.7 million, up 10% year over year. EBITDA was NOK 94.2 million in Q4 and NOK 316 million for the full year; free cash flow was NOK 71.9 million in Q4 and NOK 354 million for the full year. Management said reported revenue was in line with last year, while U.S. dollar revenue growth was 10%; for the year, EBITDA margin was 26% versus 18% in 2024, and EBIT margin reached 21% for the first time. For Q1, Pexip guided to ARR of USD 133 million to USD 136 million. Management also recommended a dividend of NOK 4 per share for fiscal 2025, up from NOK 2.5 last year.

Trond Johannessen framed the quarter as evidence that Pexip is operating in markets with strong demand, relevant products, and a solid market position. He emphasized two strategic areas: secure and sovereign communications for organizations that need privacy and data control, and interoperability for meeting rooms that need to connect across platforms. His tone was constructive and confident, pointing to continued positive trends and saying the company expects them to continue or even accelerate into 2026 and beyond.

Øystein Hem highlighted the company’s improving operating leverage, noting that ARR growth was 16% overall, EBITDA margin was 26% for the year, and the sum of ARR growth plus EBITDA margin was 42%, above the long-term ambition of more than 40%. He said Q4 revenue was affected by a 10% decline in USD/NOK and a software deal slipping into Q1 2026, but that the currency effect also reduced costs. He also noted costs were slightly down versus last year, with non-share-based salary expenses down NOK 11 million, share-based compensation up NOK 9 million, and other OpEx down NOK 3 million, and said free cash flow was supported by better working capital. He added that reporting will shift to U.S. dollars starting in 2026, with pro forma historic figures to be provided in April.

Analysts focused on why Q4 ARR beat guidance by so much, whether Secure and Custom growth could step up further, and why churn was a bit higher in the quarter. Management said the Q4 beat came from several large deals closing in the same quarter, while Secure and Custom is a longer-cycle business where growth should remain steady rather than lumpy. On churn, management said the increase came mainly from support-contract renewals in Asia, described it as a small part of the ARR base and likely a one-off, and said they are looking for more multi-year commitments. They also addressed AI, saying private AI is driving inbound demand and upsell, while AI is not seen as a major threat to Pexip’s interoperability business because of certifications, approvals, and partnerships required by major platforms.