Falconstor Software, Inc. · OTC:FALC
Falconstor Software — Q4 2005 Earnings Presentation
19 slides from Falconstor Software's earnings presentation, Feb 8, 2006
Slide 1: Q4-2005 Earnings Conference Call
Q4-2005 Earnings Conference Call Feb. 8 2006 1
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation includes forward-looking statements that involve risk and uncertainties that could cause actual results to differ materially from the forward-looking statements. These risks and uncertainties include: delays in product development; market acceptance of FalconS
Slide 3: Business Review
Business Review ReiJane Huai CEO
Slide 4: Q4'05 Highlights
Q4’05 Highlights Operation • Grew GAAP and Deferred Revenue by 37% and 79% Y/Y • Increased EPS from $0.01 in Q4 2004 to $0.03 in Q4 2005 Product • IPStor System-On-Chip (SOC) Edition for Intel/Xscale I/O Processor Data Storage and Protection Appliance for SMB/SOHO Cost-Effective edge device
Slide 5: Worldwide Headcount as of Q4'05
Worldwide Headcount as of Q4’05 - 76% in R&D & Technical Service R&D 140 TS 139 Sales 120 Marketing G&A 100 105 80 73 60 57 40 35 39 20 11 7 17 13 0 Q4-2004 Q4-2005 5
Slide 6: 2006 Objectives
2006 Objectives Target Market • Become the premier supplier of Data Protection solutions in the industry Channel • OEM Expand the scope of collaboration with existing partners Team with partners to target specific Platform, Application or Territory • SMB/SOHO Application-aware, easy-to-dep
Slide 7: Technology Differentiation
Technology Differentiation Seamless Integrated Solution (VTL, CDP & DR) with proven breadth & depth Application (Exchange, Oracle, NetBackup..) Awareness • Guaranteed Transactional Integrity of backup via Application Specific Snapshot Agent • Fastest Recovery of file, database, e-mail, system &
Slide 8: OEM Partnership & SMB/SOHO Initiatives
OEM Partnership & SMB/SOHO Initiatives Bernie Wu VP, Business Development
Slide 9: OEM/Strategic Partnership Highlights & 2006 Directions
OEM/Strategic Partnership Highlights & 2006 Directions Virtual Tape Library (VTL) • VTL continues to be one of the highest priority purchase items for IT in the Fortune 1000. • Our largest Tier 1 VTL OEM continued to experience strong growth. • All three Tier 1 VTL OEMs were in production by the e
Slide 10: OEM/Strategic Partnership Highlights & 2006 Directions
OEM/Strategic Partnership Highlights & 2006 Directions Replication/Continuous Data Protection (CDP) • We have begun moving forward again with McData • We have obtained Cisco SANTap validation and started customer acquisition on a worldwide basis iSCSI • We are encouraged by the increasing activi
Slide 11: Entering SMB/SOHO Market
Entering SMB/SOHO Market SMB/SOHO market beginning to embrace disk-based backup and remote replication • Microsoft pushing DPM solution to protect Windows File Servers • Renewed interest in performing backup & disaster recovery services over the broadband network SMB/SOHO Solutions & Services •
Slide 12: PrimeVault - Remote Backup/Replication over IP
PrimeVault - Remote Backup/Replication over IP FalconStor powers the Core and Edge Enterprise Small & Medium Business (SMB) IPStor or VTL IPStor or VTL Remote DR Hosting Service Turn-key Appliance Storage Gateway Appliance Powered by IPStor & VTL Small Office Home Office DiskSafe/FileSafe (SOHO) for
Slide 13: Financials
Financials ’ «4 zabei@falconstor.com wo Proven data protection™
Slide 14: Q4 Quarterly Results
Q4 Quarterly Results Increased Revenue Year over Year • Quarterly revenue of $13 million, up 37% from prior year • Annual revenue of $41 million, up 43% from prior year Profitable on Quarterly and Full Year Basis • First year Company achieved profitability on a full year basis • Q4 net income of
Slide 15: Scalable Business Model
Scalable Business Model Q4 2005 Compared to Q4 2004 • Revenue increased $3.5 million while expenses increased only $2.0 million • Over 40% of the year over year incremental revenue went to operating income • Gross margins were 86% both years Full Year 2005 compared to Full Year 2004 • Revenue in
Slide 16: Balance Sheet
Balance Sheet Cash, cash equivalents and marketable securities of $36.6 million as of Q4 2005 • Fifth straight quarter of positive cash flows from operations. • Positive cash flows from operations of $1.5 million for Q4 and $6.0 million year to date. • Total cash balance increased $1.5 million in
Slide 17: Overview
Overview Solid Business Fundamentals • Quarter over Quarter and Year over Year Revenue Growth • Profitable • Positive Cash Flows • Increased Deferred Revenue • Scalable Business Model Exciting Prospects for 2006 • Tier 1 VTL OEM announced during last call will begin to generate revenue in 2006 •
Slide 18: 2006 Outlook
2006 Outlook Revenue in the range of $54 - $59 million EPS in the range of $0.12 - $.18 per share EPS excludes the effects of stock option expense Expect normal Q1 seasonality 18
Slide 19: Thank you. Any questions?
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