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November 2016
RADCOM Ltd (RDCM) – Corporate Overview
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Safe Harbor Provision
Certain statements herein contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act and Section 21E of the Exchange Act. These forward-looking statements include, but are not limited to, those statements regarding expected revenues, being well positioned to capitalize on industry tailwinds and our NFV win, the market potential for NFV, expanding our direct presence in North America, Europe and Asia, investing in direct sales, our capital position, growth objectives and statements concerning assumptions made or expectations as to any future events, conditions, performance or other matters. In some cases, forward-looking statements are identified by terminology such as "may," "will," "could," "should," "expects," "plans," "anticipates," "believes," "intends," "estimates," "predicts," "potential," "opportunity" or "continue" or the negative of these terms or other comparable terminology. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or performance to differ materially from those projected. These statements are only current predictions and are subject to known and unknown risks, uncertainties, and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from those anticipated by the forward-looking statements. In addition, past financial or operating performance is not necessarily a reliable indicator of future performance and you should not use our historical performance to anticipate results or future period trends. The forward-looking statements contained herein are subject to risks and uncertainties, including those described herein under "Risk Factors" and in our most recent Annual Report on Form 20-F, under Item 3.D. - "Risk Factors" and in our other filings with the SEC. You are cautioned not to place undue reliance on these forward looking statements, which speak only as of the date on which that statement is made. We cannot guarantee future results, levels of activity, performance, achievements or that any of the events anticipated by the forward-looking statements will occur or, if any of them do, what impact they will have on our results of operations and financial condition. Except as otherwise required by law, we are under no obligation to (and expressly disclaim any such obligation to) update or revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, after the date hereof.
In this presentation, management will be referring to certain non-GAAP financial measures, which are provided to enhance overall understanding of the company’s financial performance. By excluding certain non-cash charges, non-GAAP results provide information that is useful in assessing RADCOM's core operating performance, and in evaluating and comparing our results of operations on a consistent basis from period to period. The presentation of this additional information is not meant to be considered a substitute for the corresponding financial measures prepared in accordance with generally accepted accounting principles. Investors are encouraged to review the reconciliations of GAAP to non-GAAP financial measures which are included in the “Appendix” section.
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Company Overview
Leading software-based solutions for service assurance and customer experience management
First to market with software-based and network function virtualization (NFV) probes
Groundbreaking NFV win with AT&T
Enables migration to NFV while supporting both traditional and next-generation networks
Exceptional performance with terabit scalability for mobile and fixed networks
$28 - $29.5 million revenue guidance for 2016, representing 50% to 58% growth over 2015
Founded in 1991 and publicly traded since 1997
Headquartered in Tel Aviv, Israel
The MaveriQ Solution Overview
Benefits and Use Cases
Mission-critical network and service visibility
Improve subscriber quality of experience
Reduce customer churn
Pro-actively identify and resolve network issues
Accelerate deployment of new services and migration to NFV
Increase operational efficiency and lower costs
Software-Based Highly Scalable Traditional, NFV and Hybrid
Suite of integrated applications
Unified dashboard with visibility across networks and subscribers
Service Assurance Customer Experience Management
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>$1 Billion Market Opportunity for Probe Solutions RADCOM delivers software-based probe solutions for service assurance and customer experience management
Key Market Drivers
Data acquisition
and big data analytics
Customer experience
management
Revenue uplift from reduced
customer churn
Rapid increase in
mobile data
LTE, VoLTE, IoT, M2M, and
LTE-A
Increase operational
efficiency and lower costs
Market Challenges for Probe Solutions
Alternative probe solutions historically based on purpose-built hardware
Physical probes costly to deploy and maintain
Proprietary ASIC designs slow to develop
Difficult to scale for next-generation services
No migration path for NFV networks
RADCOM Solution
Software-based solution running on standard hardware
Easy to deploy and manage
Accelerates software product design lifecycle
Highly scalable for next-generation services
Enables migration to NFV while supporting traditional networks
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Global NFV and SDN Market ($ in billions)
$0.3
$1.7
$2.3
$3.3
$5.2
$6.9
$8.3
2013 2014 2015 2016P 2017P 2018P 2019P
Source: Software Defined Networking and Network Function Virtualization market, Gartner (March 2016).
Benefits of Software and Virtualization
Accelerate time to market for new services
Increase agility and flexibility for network design
Increase scalability and lower operating costs through NFV automation
Reduce CapEx by replacing proprietary hardware with commodity hardware
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CSPs Need Software-Based Solutions To Transition to NFV RADCOM has been a first mover in offering software-based and NFV solutions for service assurance
Virtualized software appliances
High volume standard servers, storage and switches
Virtual Probes
NFV and Hybrid Networks
Legacy traditional network (Hybrid)
Traditional Network
DPI
Router
Probe Probe
Probe
Probe
Firewall
BRAS
SGSN/GGSN
SBC
Large CSPs Evaluating / Deploying NFV
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Despite the clear benefits NFV creates new complexity for service assurance
Large CSPs first to deploy NFV and many will operate hybrid networks
Most probes solutions do not support NFV and hybrid networks
Fragmented, purpose-built hardware appliances with hardware and/or software-based probes
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AT&T Selected RADCOM for its NFV Solution
RADCOM’s transformational win with AT&T
RADCOM announced the selection of its MaveriQ solution for deployment by a AT&T in January 2016
The $18 million initial order was within the framework of a multi-year sales agreement for a virtual-probe-based monitoring solution for AT&T's mobile network
Result of nine-months of intensive trials during which RADCOM’s virtual probe solution was selected over competitors' offerings by receiving 100% test score
Recognition by one of the industry's leading CSPs positions RADCOM as the leader for NFV probe-based monitoring solutions
Strong confirmation of RADCOM's multi-year strategy for its transformation to software-based solutions
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Packet Switch Core
E-UTRAN Evolved Packet Core
(EPC)
MaveriQ enables CSPs to Accelerate Migration to NFV Highly scalable, software-based solution supporting traditional, hybrid and NFV networks
Future Proof for NFV Migration Visibility Across 3G, LTE and IMS Networks
Interfaces Monitored by MaveriQ
PCRF
SGSN GGSN
MME MME
Serving Gateway PDN GW
Internet
PSTN
IP Multimedia Subsystem (IMS)
eNB
AS HSS
P-CSCF S-CSCF
BGCF
UTRAN
eNB
OCS HSS
Virtual EPC
Virtual IMS
Virtualized Network Functions (VNFs)
NFV Infrastructure (NFVI)
NFV Management and Orchestration
Orchestrator
VNF Manager
Virtualization Layer
Virtual Computing
Virtual Network
Virtualized Infrastructure
Managers
Virtual Storage
…they will need to upgrade or replace their service assurance and probe solutions
As CSPs migrate all or parts of their networks to NFV…
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The MaveriQ Solution for Service Assurance and Customer Experience Management Software-based solution for 3G, LTE, VoLTE and NFV networks
Highlights
Manages next-generation mobile and fixed networks, including LTE, VoLTE, IMS, VoIP, UMTS/GSM and mobile broadband
Multi-technology solution monitors multiple networks and services simultaneously
Highly scalable, carrier grade architecture supporting terabit networks
Best processing capacity / footprint ratio in the industry
Suite of pre-integrated software applications
Advanced real-time visibility for big data analytics
Cost-effective solution for any network size
Customer Care
Quality of Experience
Performance Analysis
SLA Management
KPI Alarms Network Monitoring
Roaming QoS
Inter-connection Quality
Analytics
MaveriQ Subscriber Dashboard
Software-Based Highly Scalable Traditional, NFV and Hybrid
Suite of Integrated Applications
Unified dashboards with visibility across networks and subscribers
Service Assurance Customer Experience Management
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Solution Deployed in Many Leading Tier 1 CSPs
50 Customers in 25 Countries
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Generating Growth and Go-to-Market Strategy RADCOM is expanding its presence in North America and Europe. Continue to focus on Asia Pacific & Latin America
Developing and Expanding Strategic Partnerships
RADCOM has partnered with solution integrators, such as Amdocs and HP, as well as technology partners, such as Intel, to
unlock further opportunities in the sales channel
Network Cloud Ecosystem OpenNFV Program
Asia Pacific Direct Sales
Latin America Direct Sales
North America Direct Sales and Partnerships
Europe Direct Sales and Partnerships
Network Builders Program
Expand presence in North America and Europe
Invest in direct salesforce and technical support to drive future large wins and scale deployments
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CloudBand
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Financial Highlights
• 3Q Earnings Highlights:
• Revenues of $7.7M, 62% YoY growth
• Reiterated our full-year revenue guidance range of $28-$29.5M; Representing 50% to 58% growth over 2015
• Strong Balance sheet:
• As of September 30, 2016, the Company had cash and cash equivalents of $43.2 million and no debt