Exasol : Half-yearly financial statements 2022

Half-Year Report 2022

| 02 | Half-Year Report

Highlights from of the first Half-year 2022

EUR 32.5 million

Annual Recurring Revenue

(ARR)

Growth of 26%	224
(based on comparable exchange rates)
	Broad customer base
	14 new customers
	in the first half of 2022

96%

Customer retention rate

Customer Churn Rate with 4% very

low compared to industry

| 03 | Half-Year Report

Content

Interim Group Management Report	04	Economic performance January to June 2022	05	Interim Consolidated Financial Statements	10
General corporate information	04	Revenues	05	Consolidated balance sheet assets	11
Corporate structure and business activity	04	Earnings	06	Consolidated balance sheet equity and liabilities	12
		Reconciliation of adjusted EBITDA	07	Consolidated income statement for the period	13
Macroeconomic situation and		Net assets and financial position	07	Consolidated statement of cash flows	14
industry developments	04	Assets	07	Consolidated statement of changes in equity	15
The macroeconomic environment	04	Equity and liabilities	07	Movements in the Group's fixed assets	16
The industry environment	04	Changes in cash and cash equivalents	08
				Notes to the Consolidated Financial Statements	18
Overall assessment by the Executive Board	04	Changes to the opportunities and risk report	08
				Responsibility Statement	26
Financial and non-financial		Forecast	08
performance indicators	05	Expected macroeconomic environment	08	Financial Calendar	27
		Expected industry environment	08
		Future company performance and outlook	09

| 4 | Interim Group Management Report

Interim Group management report

General corporate information

Corporate structure and business activity

A detailed overview of the corporate structure, the business activity, the targets and the strategy of Exasol AG is provided in the 2021 Annual Report. The statements made there still apply. There were no material changes in the first half of 2022.

Macroeconomic situation and industry developments The macroeconomic environment

According to the International Monetary Fund (IMF), global output contracted in the second quarter of this year owing to tough lock- down measures in China and the war in Ukraine, while US consumer spending under-shot expectations. The world economy, which had already been weakened by the pandemic, has been hit by several shocks: unexpectedly high inflation due to rising energy costs and supply bottlenecks, especially in the United States and the large European economies, which has led to tighter financial conditions; an unexpectedly strong slowdown in China as a result of further Covid-19 outbreaks and lockdowns; and further negative effects of the war in Ukraine.

As a result of the deteriorating economic environment, the IMF downgraded its expectations for the world economy in its World Economic Outlook published in July 2022. Due to the war in Ukraine and the continued high inflation, the IMF now projects global growth of 3.2%. This is 0.4 percentage points lower than projected in April 2022.

In its forecast, the IMF clearly emphasizes the uncertainty associated with the estimates, especially against the background of geopolitical tensions, high debt levels in the private sector and the global supply chain problems caused by Covid-19.

The industry environment

The IT market in general had a good start to the year1. The cloud and IT services segments in particular were again able to make gains. Accordingly, market research institute Gartner has adjusted its expectations for the year as a whole. In a study published in July 2022, global IT spending in 2022 is now projected to be higher than assumed in October last year, although the global environment is characterized by inflation and geopolitical uncer- tainties.

Overall assessment by the Executive Board

Exasol AG showed a positive performance in the first half of 2022. Apart from further growing its ARR, the company was able to win numerous international companies as new customers. The first six months of the current financial year also showed a positive trend in growth with existing customers. Together with the continued revenue growth in the first six months of the year, profitability improved noticeably.

The growing demand is driven by the ongoing megatrend towards digitalization, which is producing an ever-increasing amount of data. Continuously analyzing these data and gaining insight from them is of growing importance for any organization. Exasol is an important element in the data strategy of many organizations, especially data-driven ones. This is also reflected in the extremely low churn rates among our customer base. Driving insight from the global data volume and generating a critical competitive advantage from it is an important driver of our revenue and earnings growth.

• https://www.itreseller.ch/Artikel/95931/IT-_und_Business-Services-Markt_floriert_im_ersten_Quartal_2022.html

| 5 | Interim Group Management Report

Exasol also expanded its offering with new products and services in the first half of 2022.

In February 2022, Exasol launched an SaaS solution in the market. This is a very important portfolio extension, which makes it easy for customers to start the database directly as a service in self- service mode and to use it on a pay-as-you-go basis. This solution also improves use of so-called elasticity in the cloud, whereby data is kept at low cost and only made available for analysis on a selective basis (scale up / scale down).

Another focus in R&D was to drive the development of a new product in the area of Data Warehouse Automation, which can automate the modeling of data marts and entire data warehouses and thus significantly simplify the process of data engineering. This tool will be developed not only for the Exasol DB, but also and especially for third party databases and therefore opens the access to a broader target market.

Even though the economic environment has deteriorated since the beginning of the year due to rising inflation, the lockdowns in China and their effects on the global supply chains and the consequences of the war in Ukraine, we believe that the positive impetus from the general trend towards digitalization and the growing data volumes will continue to drive our future growth.

The Executive Board thus considers the general business performance as well as the net assets, financial position and results of operation to be satisfactory on balance. The company's revenue growth and profitability showed a positive trend in the first half of 2022 and were in line with expectations. The main drivers of the market thus remain intact. What is more, the Executive Board

sees great market opportunities in the long term, which should be reflected in continued growth and greatly improved profitability.

Financial and non-financial performance indicators

In order to provide a clear and transparent presentation of the Exasol Group's business performance, the Group's annual and interim financial statements include not only the disclosures required by German HGB reporting standards but also additional financial performance indicators, mainly annual recurring revenue (ARR). In 2022, the Executive Board additionally started using adjusted EBITDA as well as cash and cash equivalents. ARR, adjusted EBITDA and cash and cash equivalents are the key financial performance indicators for Exasol.

Annual recurring revenue (ARR) is defined as the annualized value of the contractually agreed recurring revenue component of term-based contracts with a term of at least 12 months. ARR is an indicator that shows the amount of recurring revenue, excluding new business volume, that is expected over the next twelve months provided that no contracts are terminated or existing contracts are renewed. For the financial year 2022, the contractually agreed recurring revenue components as of balance sheet date are multiplied by 12 to calculate ARR.

It is important to distinguish between ARR and recurring revenue of the reporting period: Recurring revenue of the reporting period includes revenue from software rental as well as ongoing support and maintenance services that are based on a term-based contract.

Adjusted EBITDA is the second financial key performance indicator besides ARR. Here, earnings before interest, taxes, depreciation and amortization (EBITDA) are adjusted for stock appreciation rights granted to the Executive Board and employees before the 2020 IPO.

Cash and cash equivalents, as the third financial key performance indicator, are defined as financial resources available at short notice as reported in the balance sheet as of the reporting date.

Economic performance January to June 2022

Revenues

in EUR millions	H1 2022	H1 2021	Change
ARR (as of 30 June)	32.5	25.8	26.0%
Revenue	16.1	13.1	22.9%
Recurring revenue	15.1	12.0	25.8%
in % of revenues	93.8	91.6	2.2%p
Other revenue	1.0	1.1	-9.1%
in % of revenues	6.2	8.4	-2.2%p

ARR climbed to EUR 32.5 million in the first half of 2022. This represents an increase of 26.0% compared to the same period of the previous year (30 June 2021: EUR 25.8 million). We were able to win a total of 14 new customers in the first half of 2022 (H1 2021: 8 new customers), thereof eight in the second quarter alone (Q2 2021: 3 customers). At the end of the first half of 2022, the company had a total of 224 customers.