Nitro Software : Q4 2021 Quarterly Activities Report and Appendix 4C

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28 January 2022

Nitro Software Limited (ASX: NTO) ('Nitro' or the 'Company'), a global document productivity software company driving digital transformation in organisations around the world, today releases its (unaudited) Appendix 4C Quarterly Cash Flow Report for the quarter ended 31 December 2021 and is pleased to provide the following update on financial and operating performance.

Q4 2021 Highlights

• Annual Recurring Revenue ('ARR') at 31 December 2021 excluding the Connective acquisition was US$40.1 million, an increase of 41% vs. 31 December 2020, in line with guidance. ARR at 31 December 2021 including Connective was US$46.2 million.
• FY2021 revenue excluding Connective was approximately US$50.7 million, an increase of 26% compared to FY2020, at the top end of the upgraded guidance range. FY2021 revenue including Connective was approximately US$50.9 million.
• Transition to a SaaS business model continues1, with subscription revenue now comprising 71% of total revenue in Q4 2021, compared to 58% in Q4 2020. In the larger Business sales2 channel, 88% of revenue in Q4 2021 was subscription, with this transition being effectively completed in FY2021.
• Successfully completed a A$140.0 million capital raise through the combination of an institutional placement and a retail entitlement offer.
• Successfully completed the €70.0 million acquisition of Connective, which closed on 20 December 2021, with robust post-acquisition integration activities ongoing.
• Cash and cash equivalents of US$48.2 million including Connective as at 31 December 2021 with no debt3, providing a strong financial position to pursue growth opportunities.

1. All numbers in this paragraph refer to Nitro's revenue excluding Connective.
2. Nitro Business sales comprise sales executed by Nitro's Sales team and exclude online/eCommerce sales.
3. Excluding leases covered under AASB 16.

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Sam Chandler, Nitro's Co-Founder and Chief Executive Officer, said: "Q4 2021 was one of the most active and notable periods in Nitro's history, with the successful completion of the Connective acquisition, and the capital raising that helped fund it, setting us up for further long-term growth.

With the integration of Connective and its high trust, enterprise-grade eSigning, eID and workflow capabilities, the Nitro Productivity Platform can now meet virtually every customer need in eSigning. We enter FY2022 well positioned to continue scaling our PDF productivity footprint and to become a leading global player in the fast-growing enterprise eSigning market.

Throughout the activity of the past quarter, we have retained our focus on the core business and maintained our sales momentum, delivering a strong revenue outcome, at the top end of our upgraded guidance range. We ended the year with a worldwide team of over 300 Nitronauts and we look forward to further scaling the business in 2022."

Performance in Q4 2021 and FY20214

Nitro completed FY2021 with total revenue of US$50.7 million excluding Connective, up 26% compared to FY2020, at the top end of the upgraded guidance range provided in October 2021 of US$49.0 million to US$51.0 million. FY2021 revenue including Connective was approximately US$50.9 million.

Nitro finished Q4 2021 with ARR at year-end of US$40.1 million excluding Connective, up 41% from 31 December 2020 and in line with the guidance range of US$39.0 million to US$42.0 million. ARR at 31 December 2021 including Connective was US$46.2 million. Key customer wins and expansions in the quarter included Deutsche Bank, ICON, Eversheds Sutherland, Swiss Re and Ausenco.

Nitro's transition to a SaaS business model continues5, with subscription revenue in Q4 2021 representing 71% of total revenue, compared to 58% in Q4 2020. FY2021 subscription

1. Financial metrics provided are unaudited results for the quarter and the year ending 31 December 2021. Financial metrics provided reflect the performance of Connective post close after 20 December 2021, unless explicitly indicated otherwise.
2. All numbers in this paragraph refer to Nitro's revenue excluding Connective.

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revenue comprised 66% of total revenue, compared to 53% for FY2020, reflecting Nitro's ongoing successful conversion to a subscription-based business model. The transition to subscription in the dominant Business sales channel was effectively completed in FY2021, with 88% of revenue in Q4 2021 generated from subscription contracts.

Cash receipts from customers in FY2021 amounted to US$51.5 million, up 21% compared to FY2020. Cash receipts from customers were US$14.2 million in Q4 2021, up 19% from

Q4 2020.

Net cash outflow from operations in FY2021 was US$10.1 million, largely reflecting Nitro's continued strategic investments in areas that will drive future growth, such as personnel, development of the product suite and scaling of the go-to-market engine. Cash outflows for investing activities included the €70.0 million (~US$79.6 million) consideration paid for the acquisition of Connective and US$6.0 million consideration paid for the acquisition of PDFpen.

Nitro successfully completed a A$140.0 million capital raise through the combination of an institutional placement and a retail entitlement offer in Q4 2021 in order to fund the acquisition of Connective. The Company's cash balance of US$48.2 million at 31 December 2021 provides the Company with the financial flexibility to pursue continued growth opportunities.

Connective Acquisition

On 20 December 2021, Nitro closed the acquisition of Connective NV, Belgium's leading eSign SaaS business. The integration is well underway, with Connective's market-leading products available to be sold immediately into Nitro's customer base of over 12,000 business customers.

In addition to upsell and cross-sell opportunities across the combined customer base of over 13,000 business customers, Nitro believes the expanded product suite delivered by the Connective acquisition will drive substantial market opportunities as organisations around the world increasingly demand high-trust and highly secure eSigning and workflow solutions. Nitro expects sales of Connective products to Nitro customers to deliver annualised run-rate revenue synergies of ~US$2.5 million by the end of FY2022.

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FY2021 Outlook

Operating EBITDA6 loss is expected to be within the range of US$7.5 million to US$8.0 million, compared to the updated EBITDA loss guidance range of US$8.0million to US$10.0 million provided on 27 October 2021. Operating EBITDA guidance is upgraded given the overperformance on revenue.

ARR, Revenue and Operating EBITDA guidance for FY2022 will be provided on 24 February 2022 along with Nitro's audited results for the year ended 31 December 2021.

6 Operating EBITDA excludes stock-based payments, foreign exchange gains and losses, and one-time expenses related to M&A.

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Annexure 1

Use of Funds Statement (Listing Rule 4.7C.2)

USD millions		As per IPO			Actuals		Comments
	prospectus			through31
					Dec 2021
Cash received by Nitro from the Offer to be used for the
execution of the Company's business objectives (such as
cost of sales, marketing spend, research and development,		34.9		21.98		On track
and general and administrative costs) and potential
acquisition opportunities as outlined in the prospectus.

The earmarked funds have not yet been spent but operating expenses and cash balances continue to track to plan as at 31 December 2021.

Included in section 6.1 of the Appendix 4C for the quarter ended 31 December 2021 are payments made to related parties of Nitro. These amounts relate to Directors' fees, salaries and allowances paid to Directors and their associates.

Ends

Authorised for release to the ASX by the Board.

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