Transcript Subscription + Content + Access

NMS Communications
Safe Harbor Statement
This presentation may contain projections or other forwardlooking statements regarding future events or the future
financial performance of the company. While these statements
represent management’s current judgment on the future
direction of the business, actual results may differ materially
from any future performance suggested in the company’s
forward-looking statements. We refer you to the documents
that the company files from time to time with the Securities
and Exchange Commission. These documents contain and
identify important factors that could cause the actual results to
differ materially from those contained in our projections or
forward-looking statements.
www.nmscommunications.com
Slide 2
NMS Communications at a Glance
 Applications & platforms for value-added services
 Leader in ringback tone service deployments
 Technology expertise spans network to handset
 Products deployed in operator networks in 100+ countries
 25 year history of successes and industry “firsts”
 400+ employees; global presence
www.nmscommunications.com
Slide 3
Investment Summary
 Focused on high growth Value
Added Services markets
 Implemented cost reductions
and strategic shift to lower cost
development
 RBT leader introducing new
applications, extended services
& new business model
 Technology business entering
strong new products cycle
www.nmscommunications.com
Slide 4
Operator Conundrum
 Voice MOU continue to rise: price
continues to drop
 Not enough ROI for network and
technology investments made
 Operators need new and innovative
value added services to grow
 Operators need more help making
VAS successful
$85 billion services market in 2005 –
growing to $206 billion in 2010
www.nmscommunications.com
Modular Application Platforms
Open Access ™ and Vision
 Platforms for voice,
video, and data
applications and
services
 Any network, anywhere,
TDM, IP, IMS
 Software, components &
servers, cPCI, PCI
Express, AdvancedTCA
 Fast time-to-market
 Leading technology, tool
set for development and
deployment
 World class supply
chain, global support
www.nmscommunications.com
Unified
communications
Video, audio and
web conferencing
Mobile
Centrex
IVVR
Video
messaging
Slide 6
Speech-driven
applications
Voice and
Video SMS
IP PBX
Mobile video
services
Contact center
solutions
Building & Sustaining Value
Example
Subscription + Content + Access
$85 Billion Services Revenue
Professional & Managed Services
I&C, M&S, Pro Services
Managed Services
Applications
Increasing Value
Services Revenue
$36
$5.00
$2.00
Technology
$0.12
www.nmscommunications.com
RBT 1st Yr Value
Per Sub
MyCaller Ringback
Value Proposition
 Any phone, any network
 Drive subscription and
content revenue
 Business & Ad models
Features
 Diverse personalization options
 Viral marketing accelerators
 Complete content management
 Comprehensive reporting
Unique Selling Points
 First in operator deployments
 Ringback knowledge experts
 Marketing services capabilities
www.nmscommunications.com
Slide 8
MyCaller Ringback Subscribers
5,000,000
140,000,000
4,500,000
120,000,000
4,000,000
100,000,000
3,500,000
3,000,000
80,000,000
2,500,000
60,000,000
2,000,000
1,500,000
40,000,000
1,000,000
20,000,000
500,000
0
Jan- Feb- Mar- Apr-05 May- Jun- Jul-05 Aug- Sep- Oct-05 Nov- Dec- Jan- Feb- Mar- Apr-06 May- Jun- Jul-06 Aug- Sep- Oct-06 Nov- Dec- Jan- Feb- Mar05 05 05
05 05
05 05
05 05 06 06 06
06 06
06 06
06 06 07 07 07
Total Subs
www.nmscommunications.com
RBT Subs
MyCommunityTM Messaging
Value Proposition
 Any phone, any network
 Drives transactions revenue
 New source of content revenue
Features
 Personalized multimedia messages
 Easier to use than texting
 Wide repertoire of avatars, other
content
Unique Selling Points
 Voice and video functionality
 Talking video message (Avatar)
 First to market
 Build on MyCaller investment
www.nmscommunications.com
Strategic Summary
Services Revenue
Subscription + Content + Access
 Move to revenue share model
$85 Billion Services Revenue
Professional & Managed Services
I&C, M&S, Pro Services
Managed Services
 Expand & enhance services offerings
Applications
 Build RBT footprint
Technology
 Expand applications offerings
 Extend technology leadership
 New design win focus
 3rd Party developer focus
www.nmscommunications.com
Slide 11
Business Plan & Financial
Overview
www.nmscommunications.com
Slide 12
Product Line Revenues
Platforms
VQS
35,000
100,000
30,000
80,000
25,000
60,000
20,000
40,000
15,000
10,000
20,000
5,000
-
2003
2004
2005
2003
2006
Mobile Applications
2004
2005
2006
AccessGate
10,000
4,000
8,000
3,000
6,000
2,000
4,000
1,000
2,000
-
2003
2004
www.nmscommunications.com
2005
2003
2006
Slide 13
2004
2005
2006
Balance Sheet
(In $Millions except DSO and Inventory Turns)
Mar '06
$61.7
$4.4
$20.4
$21.5
$108.0
Jun '06
$57.9
$2.8
$17.8
$22.0
$100.5
Sept '06
$35.9
$4.4
$15.2
$20.8
$76.3
Dec '06
$32.3
$3.6
$13.3
$20.2
$69.3
Mar '07
$30.2
$3.8
$12.1
$20.2
$66.3
Liabilities
Deferred Revenue
Stockholders' Equity
Total Liab. & S.E.
$15.1
$7.7
$85.2
$108.0
$13.9
$4.6
$82.0
$100.5
$13.2
$5.2
$57.9
$76.3
$14.3
$4.4
$50.6
$69.3
$13.6
$5.8
$46.9
$66.3
DSO with Deferred Revenue
60 Days
61 Days
66 Days
10.8X
10.3X
9.3X
Cash & Securities
Inventory
Accounts Receivable
Other Assets
Total Assets
Inventory Turns with Deferred Inventory
3
Slide 14
www.nmscommunications.com
55 Days 57 Days
8.5X
$20 million share repurchase
8.4X
Target Business Model** (Non-GAAP)
$s Millions
Drivers
FY 2006
FY 2006
Q107
Q107
Revenues
Target
Model
100%
$99.6
100%
$19.0
100% Mobile Apps Pipeline
Gross Margin
63-65%
$64.8
65%
$11.6
61%
Rev Share Bus Model
Operating Expenses
SG&A
R&D
Restructuring
Total Opex
26-29%
16-18%
42-46%
$44.3
$25.4
$5.5
$75.2
45%
26%
5%
76%
$9.9
$5.4
$0.0
$15.2
52%
28%
0%
80%
Right-sized
Low Cost Devel.
Operating Income
17-21%
($10.4)
-10%
($3.7)
-19% B/E 2H07*
High Leverage
*Guidance as of 4/26/07:
• Q2 revenue substantially higher, 50% reduction in non-GAAP Loss
• Expect to operate at about breakeven levels on a non-GAAP basis for 2H 2007
**Not including impact of stock-based compensation and amortization of acquired intangible assets
See press release and SEC filings for further information
www.nmscommunications.com
Slide 15
Success in 2007
 Multi-year view
 Value creation through VAS leadership and profitable growth
 Financial turnaround
 Break-even or better operations by H2
 Approach target model by late 2008/2009
 Setting up growth and a solid 2008
 Double “subscribers passed”
 3X increase in subscribers
 2-3 new applications
 Begin shift to “by the drink” revenue model
 Major new design wins
 Continue tight expense control
www.nmscommunications.com
Slide 16
NMS Communications
www.nmscommunications.com