Nitro Software : Q1 2022 Quarterly Activities Report and Appendix 4C

29 April 2022

Nitro Software Limited (ASX: NTO) ('Nitro' or the 'Company'), a global document productivity SaaS company driving digital transformation in organisations around the world, is pleased to provide this update on the Company's financial and operating performance alongside its Appendix 4C Quarterly Cash Flow Report for the quarter ended 31 March 2022.

Q1 2022 Highlights (Compared to Q1 2021)

• • Annual Recurring Revenue (ARR) excluding Connective at 31 March 2022 up 40%; including Connective up 61%.

• • SaaS subscription revenue reached 72% of total revenue, vs 61% in Q1 2021.

• • Record cash receipts from customers up 42% to US$17.0 million.

• • Strong financial position, with cash of US$42.1 million at 31 March 2022 and no debt1.

• • Integration of Connective progressing well and on schedule, with key milestones relating to the combined go-to-market team and product roadmap achieved.

• • Nitro ranked as a top three vendor in global eSign market by leading technology analyst firm GigaOm2.

• • Updated guidance for improved FY2022 Operating EBITDA3 based on lower operating expenditures, reflecting enhanced business efficiencies:

  • o FY2022 Operating EBITDA loss between US$15 million and US$18 million (previously US$18 million - US$21 million);

  • o No change to ARR and Revenue guidance.

• • Nitro expects to move toward a cash flow breakeven profile4 in 2H 2023.

• 1 Excluding leases covered under AASB 16.

• 2 GigaOm Radar for E-Signature Solutions, March 2022.

• 3 Operating EBITDA excludes stock-based payments, FX gains and losses, and one-time expenses related to M&A.

• 4 Cash flow breakeven profile refers to positive operating cash flows, after taking into account net working capital, capex, and any lease or tax payments.

Commenting on the Company's Q1 2022 performance, Nitro Co-Founder and Chief Executive Officer Sam Chandler said: "Nitro delivered record cash receipts from customers over the opening quarter of 2022 as the Company continues to execute on its growth strategy.

"In parallel, we continued to focus on integrating Connective to ensure we deliver on the full benefits of this acquisition and the game-changing technology and team it brings. The integration is progressing well and on schedule, with Connective's market-leading high-trust, enterprise-grade eSigning, eID and workflow capabilities now available to Nitro customers. Our go-to-market team is focused on cross-selling the expanded product set to a combined customer base of over 13,000 businesses around the world.

"At a strategic level, when we announced the acquisition of Connective last year, we said it would position Nitro as a top three solution for enterprise eSigning. That conviction was confirmed in the latest GigaOm Radar report where Nitro was identified as a leader and a 'fast mover,' and ranked as a top three vendor in global eSigning.

"We have entered 2022 well positioned to continue scaling our document productivity and workflow platform, and to cement our status as a leading global player in enterprise eSigning at a time when high-trust solutions are in growing demand."

Q1 2022 Performance5

Growth in ARR and new customers

Nitro maintained its strong sales momentum in Q1 2022, with revenue exceeding internal expectations and ARR excluding Connective at 31 March 2022 up 40%, compared to ARR at 31 March 2021. Including Connective, ARR increased by 61% at the end of Q1 2022 over Q1 2021.

The increase in ARR was driven by key customer wins, expansions and renewals in the quarter, including Lloyds Banking Group, Subsea 7, NRG Energy, BP, BNP Paribas and Pioneer Natural Resources.

The ability to offer Connective's market-leading eSigning, workflow and eID products to Nitro's existing enterprise customer base is quickly generating cross-sell opportunities and creating

5 Financial metrics provided are unaudited results for the quarter ended 31 March 2022. Financial metrics provided include Connective post close after 20 December 2021, unless explicitly indicated otherwise.

strong customer leads. The Connective acquisition remains on target to deliver revenue synergies of ~US$2.5 million in 2022.

Record quarterly cash receipts

Nitro recorded cash receipts of US$17.0 million in Q1 2022, a record for the business and a 42% increase over the quarter ended 31 March 2021. Trailing 12-month cash receipts from customers at 31 March 2022 was US$56.6 million, up 27% over prior corresponding period.

Excluding payments relating to last year's capital raising and acquisition of Connective, net cash outflow from operating activities for the quarter ended 31 March 2022 was US$3.5 million compared to US$1.5 million in the quarter ended 31 March 2021.

These outflows reflect Nitro's continued strategic investments in areas that will drive future growth, such as personnel, product development and scaling of the go-to-market engine. This investment underpinned a continued increase in SaaS subscription revenue as a proportion of total revenue to 72% for the quarter ended 31 March 2022 as compared to 61% for the quarter ended 31 March 2021.

Nitro's cash balance at 31 March 2022 was US$42.1 million.

Connective Integration and Product Roadmap

The integration of Connective continues at both the organisational and product level. Nitro has implemented a new company-wide organisational structure that integrates the Connective team and ensures the business is harnessing the strengths of all its people.

At a product level, Nitro has a clear roadmap for integrating Connective's market-leading solutions into the Nitro Productivity Platform. The first stage of this integration, offering Connective's high-trust eSignature, workflow and eID products to new and existing enterprise customers, is already underway. Deeper integration, including a uniform user experience to create a best-of-breed suite of products able to meet any customer requirement, will be rolled out progressively through FY22.

Among other milestones, demonstrating Nitro's significantly enhanced product roadmap and focus on high-trust eSigning, the Company achieved its target of delivering data residency support in the US and Australia during the quarter. This is increasingly important for many enterprise customers and especially those in highly regulated industries.

The strategic importance of the Connective acquisition was recognised in the March 2022 GigaOm Radar for E-Signature Solutions report, which stated "Nitro Sign has emerged as a leader with its acquisition of Connective, providing a platform suite with aggressive pricing and best-in-class functionality". The report ranked Nitro as "exceptional" with "outstanding focus and execution" in areas such as its positioning with large enterprise customers, advanced digital signatures and analytics.

2022 Outlook

Through 2022, Nitro will continue to focus on the integration of Connective as well as its platform product strategy to drive increased adoption of the Company's PDF productivity, eSigning and analytics solutions across new and existing customers in the enterprise, mid-market and SMB segments.

Nitro has made changes to its operating plan for FY2022 and is reducing certain costs given its ability to realise greater investment efficiencies while maintaining its robust growth strategy in the US$28 billion global PDF productivity and eSigning software markets. The Company is moving toward a cash flow breakeven profile in 2H 2023.

These changes are expected to deliver the following results for FY2022, including a significantly reduced EBITDA loss, reflecting enhanced business efficiencies:

• • Operating EBITDA loss between US$15 million and US$18 million (previously US$18 million - US$21 million).

• • Ending ARR between US$64 million and US$68 million, representing 39% - 47% growth vs FY2021 (no change).

• • Revenue between US$65 million and US$69 million, representing 29% - 36% growth vs FY2021 (no change).

• • Nitro expects to move towards a cash flow breakeven profile in 2H 2023.

Annexure 1

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

USD millions

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, and general and administrative costs) and potential acquisition opportunities as outlined in the prospectus.

As per IPO prospectus	Comments
34.9	28.37	On track

The earmarked funds have not yet been spent but operating expenses and cash balances continue to track to plan as at 31 March 2022.

Included in section 6.1 of the Appendix 4C for the quarter ended 31 March 2022 are payments made to related parties of Nitro. These amounts relate to Directors' fees, salaries, bonuses and allowances paid to Directors and their associates.

Ends

Authorised for release to the ASX by the Board.