Slide 1: Second Quarter 2019 Results
Second Quarter 2019 Results Mr. Tim Ti, Chief Executive Officer Mr. Eric Lam, VP of Finance August 13, 2019 www.utstar.com
Slide 2: Disclosure and Forwarding Looking Statements
Disclosure and Forwarding Looking Statements This investor presentation contains forward-looking statements, including statements regarding the Company's expectation regarding its strategic initiatives and business outlook. Forward-looking statements are based on current expectations, estimates, for
Slide 3: Q2 2019 Financial Highlights
Q2 2019 Financial Highlights Q2 2019 Y/Y Change Q/Q Change Revenues $13.9 -51.3% -43.6% Gross Profit $5.0 -32.7% -28.0% Operating Expenses $7.1 +1.6% -2.2% Operating Loss -$2.1 -$2.6 -$1.8 Net Income $1.7 +$1.8 +$1.3 Basic EPS $0.05 +$0.05 +$0.04 Cash Balance (including Restricted Cash) $55.1 -31.5%
Slide 4: Key Recent Operating Highlights
Key Recent Operating Highlights • Ongoing Evaluation of 5G Transport Network Technologies with Major Carrier in China • Product Launch at Softbank World 2019 • Ramp of goBox Business Continues 4 8/14/2019 www.utstar.com ©2019 UTStarcom, Inc. All rights reserved.
Slide 5: Market Opportunity: 5G Transition
Market Opportunity: 5G Transition • SkyFlux Platform: Segment Routing Product Family Based on Segment Routing over IPv6 or MPLS data plane Integrated with FlexE as well as SDN platform SOO network Excellent packet optical Value proposition: transport designed and o Scalability optimized to mee
Slide 6: SkyFlux UAR Segment Router Family
SkyFlux UAR Segment Router Family Service Network Orchestrator Analytics Intelligent Networking: Source Routing + SDN + 10/100GE Integrated Control and Management April 19, 2018 Platform (SDN) Announced Enable POC-ready release network programmability, SDN-based automation, and high network scalabil
Slide 7: SyncRing: 4G/5G-ready Synchronization
SyncRing: 4G/5G-ready Synchronization 4G 5G XBC340/XBC341 SyncRing XGM30 Sync requirements: Sync requirements: Boundary Clock / POE Grand Master ±1.5µs 130ns to ±1.5µs GNSS Antenna GNSS Antenna CO SyncRing XBC510 SyncRing XGM20 T-GM Boundary Clock Grand Master ePRTC IP Network T-BC T-BC T-GM SyncE/P
Slide 8: Key Recent Operating Achievements
Key Recent Operating Achievements • Ongoing Evaluation of 5G Transport Network Technologies with Major Carrier in China • Product Launch at Softbank World 2019 • Ramp of goBox Business Continues 8 8/14/2019 www.utstar.com ©2019 UTStarcom, Inc. All rights reserved.
Slide 9: Softbank World 2019
Softbank World 2019 UTStarcom @ SBW2019 UTStarcom is a Diamond sponsor of the event Key Message: Driving network evolution Major Focus Advanced network infrastructure including next-gen packet optical transport, SR-based routing, network disaggregation concept, network synchronization, SDN-based
Slide 10: SyncRing XBC340 and XBC341
SyncRing XBC340 and XBC341 New products focused on delivering compelling benefits • SyncRing XBC340 and XBC341 Designed to play the role of highly accurate boundary clocks in a PTP IEEE1588v2 network Help ensure high end-to-end network time synchronization accuracy, providing full on-path suppor
Slide 11: Key Recent Operating Achievements
Key Recent Operating Achievements • Ongoing Evaluation of 5G Transport Network Technologies with Major Carrier in China • Product Launch at Softbank World 2019 • Ramp of goBox Business Continues 11 8/14/2019 www.utstar.com ©2019 UTStarcom, Inc. All rights reserved.
Slide 12: goBox
goBox • Smart vending machine automated cloud shopping platform • Smoothly integrates with UT’s cloud platform • Uses load and image recognition, sensors and big data for big data streamlined automated shopping experience image sensors • goBox is getting market traction recognition • Expect three ma
Slide 13: Market Opportunity: Unattended Retail
Market Opportunity: Unattended Retail goBox Platform integrates leading-edge technologies AI features including: o Facial recognition o Image analysis o Behavior identification Integrated load and image sensing Cloud-based system management and support E-payment Real-time interactive capab
Slide 14: Innovation Remains Our Focus
Innovation Remains Our Focus Segment Routing (SR): SPN Technology ① A new forwarding paradigm Segment Routing ② Source routing technology New tunneling technology in packet network base on source routing: SR-TP/SR-BE ③ SR TP/SR BE FlexE: ④ Remove complexity of MPLS networks ① Various Ethernet MAC ra
Slide 15: Revenue
Revenue • Down 51% y/y and down 44% q/q • India accounted for the majority of Q2 revenue 60.0 52.1 50.0 40.0 28.5 30.0 26.0 24.7 22.6 20.0 18.2 12.7 13.9 10.0 0.0 2017 Q3 2017 Q4 2018 Q1 2018 Q2 2018 Q3 2018 Q4 2019 Q1 2019 Q2 Revenue($M) 15 8/14/2019 www.utstar.com ©2019 UTStarcom, Inc. All rights
Slide 16: Gross Profit and Gross Margin
Gross Profit and Gross Margin • Gross profit: down 33% y/y and down 28% q/q • Gross margin: Higher margin reflects product and geographic mix 12.0 50.0% 10.6 45.3% 9.9 45.0% 10.0 40.5% 40.5% 9.1 40.0% 36.2% 8.0 7.5 35.0% 7.0 28.3% 30.0% 26.2% 5.8 25.0% 6.0 25.0% 5.0 4.6 19.0% 20.0% 4.0 15.0% 10.0% 2
Slide 17: Operating Expense/Operating Income (Loss)
Operating Expense/Operating Income (Loss) • SG&A expenses decreased 27% y/y and 21% q/q • R&D expenses increased 45% y/y and 19% q/q, which reflected our continuing investment in 5G technologies and product development 10.0 5.0 4.1 9.0 4.0 8.3 8.0 7.5 3.1 7.3 7.1 6.8 7.0 3.0 7.0 6.5 2.3 5.8 6.0 2.0
Slide 18: Net Income (Loss) and EPS
Net Income (Loss) and EPS • Achieved profitability for the second consecutive quarter • Benefited from the write-off of an aged payable and a tax reserve adjustment 5.0 0.15 4.0 4.0 0.11 0.10 3.0 2.2 0.06 0.06 2.1 0.05 2.0 1.7 0.05 0.01 1.0 0.4 - - -0.00 -0.1 -1.0 -0.05 -0.04 -2.0 -1.3 -0.10 -3.0 -0
Slide 19: Cash Flow
Cash Flow • Cash used in • Operating activities $9.7M • Financing activities $0.6M • Quarter-end cash and equivalents $55.1M 19 8/14/2019 www.utstar.com ©2018 UTStarcom, Inc. All rights reserved.
Slide 20: Q3 2019 Outlook
Q3 2019 Outlook • Revenue expected to be in the range of $13 to $17 million • Quarterly revenue typically correlates with timing of project fulfillment 20 8/14/2019 www.utstar.com ©2019 UTStarcom, Inc. All rights reserved.
Slide 21: Investor Relations Contacts
Investor Relations Contacts For investor and media inquiries, please contact: China: United States: UTStarcom Holdings Corp. Fei Wang, Director of Investor Relations The Blueshirt Group Phone: +852-3951-9757 Email: fei.wang@utstar.com Ralph Fong Ning Jiang, Investor Relations Phone: +1 (415) 489-219