Slide 1: Investor Presentation August 2020
Investor Presentation August 2020 Networking and Core Infrastructure Solutions for Canadian Businesses
Slide 2: Forward-Looking Information
Forward-Looking Information 2 This presentation includes certain forward-looking statements that are made as of the date hereof and are based upon current expectations, which involve risks and uncertainties associated with our business and the economic environment in which the business operates. All
Slide 3: Non-GAAP Measures
Non-GAAP Measures 3 Adjusted EBITDA ARPU The term “ARPU” refers to the Company’s average revenue per customer per month in the period. The The term “EBITDA” refers to earnings before deducting interest, taxes, depreciation and amortization. The Company believes that ARPU is useful supplemental infor
Slide 4: TeraGo at a Glance
TeraGo at a Glance 4 24/38 GHz NATIONAL Wireless and Fibre Network Spectrum covering ~9.1 billion MHz-Pops $47M Revenue ~3,000 Customers 92 % of Licensed mmWave $17M TTM Adj. EBITDA Spectrum held 5 Data Centres 600+ Deployed Towers $ >3 B Enterprise TAM Leading managed cloud and connectivity solutio
Slide 5: Largest Holder of mmWave Spectrum in Canada
Largest Holder of mmWave Spectrum in Canada 5 Coverage Spectrum Coverage Map Spectrum Coverage Map includes 2,210 24 GHz (14 of 20 licenses issued) 38 GHz (25 of 27 licenses issued) MHz of Canada’s 6 Licenses from 100-199 MHz Licenses from 200-299 MHz largest cities and Licenses over 300 MHz 10M hou
Slide 6: Regulatory Conditions Support mmWave Value
Regulatory Conditions Support mmWave Value 6 5G Fixed Wireless UNITED STATES Access already permitted with May 2017 Jan 2019 Jun 2019 Jan 2020 a clear path to The 37-39 GHz licenses sold on Verizon to acquire FCC completes 28GHz FCC’s completes 24GHz mobile services Straight Path auction auction ave
Slide 7: 5G Fixed Wireless Ready Footprint
5G Fixed Wireless Ready Footprint 7 TeraGo’s mmWave Spectrum Market Share Business Connectivity Total mmWave assets in Canada (based on MHz-PoPs) Addressable Market1 have scarcity 24 GHz 38 GHz Total value and Bell Bell ABC Telus 5% Xplornet ABC Telus 4% 0.5% 0.1% 5% 0.5% 4% provide a time TeraGo 1-
Slide 8: 5G Fixed Wireless Access
5G Fixed Wireless Access 8 5G FWA Trial Underway Other 5G FWA Trials & Deployments First phase technical trial complete: • Up to 700 Mbps per TeraGo is customer end point uniquely • Latency of 3-4ms positioned to be first carrier in Canada to launch Second phase technical trial in early 2020: 5G Fix
Slide 9: Financial Highlights
\ Fe ll TeraGo Financial Highlights
Slide 10: Multi-Pronged Strategy – Update & Outlook
Multi-Pronged Strategy – Update & Outlook 10 Profitable business and positive FCF generation Building a premier channel and alliance program Positioned for 5G fixed wireless
Slide 11: Strengthen the Connectivity Business
Strengthen the Connectivity Business: 11 Significant future opportunity leveraging existing fixed wireless footprint Backlog MRR Churn ARPU Manage Churn $92,096 $86,903 and Create Up-sell $57,081 $89,296 1.6% 1.5% 1.7% $1,023 $1,014 $1,019 $1,033 $1,041 Opportunities in 1.3% 1.4% Our Customer $47,67
Slide 12: Growth from Cloud and Colocation
Growth from Cloud and Colocation: 12 Continued market demand for managed services under the Hybrid IT model Backlog MRR Churn ARPU Investing in our $37,237 Sales $3,185 $3,248 $3,393 $3,240 $3,255 1.7% Organization to $17,049 $18,225 $18,864 1.3% Accelerate 1.0% 1.1% 0.9% $18,615 Growth and Target t
Slide 13: Resilient Recurring Revenue Base
Resilient Recurring Revenue Base 13 $59.1 $57.7 $55.4 $40.8 $54.3 $44.6 $36.4 $35.0 $48.4 All $ figures in CAD millions $47.1 $30.4 $29.4 62% 38% 2014 TTM* Connectivity 2016 2017 2018 2019 2015 Cloud and Colocation $13.2 $18.3 $19.0 $19.3 $18.1 $17.7 * Trailing Twelve Months ended June 30, 2020
Slide 14: Adjusted EBITDA and Cash Flow
Adjusted EBITDA and Cash Flow 14 35.5% 35.2% 31.9% 32.1% 23.2% 23.9% $18.9 $18.4 $17.5 All $ figures in CAD millions $16.8 $12.9 $13.0 $6.5 $6.5 $9.4 $9.2 $8.2 $11.0 $7.4 $10.3 $6.7 $7.0 2014 Adjusted EBITDA Margin TTM* IFRS 16 Adjusted EBITDA Impact 2017 2018 2019 2016 2015 2014 Adjusted EBITDA Cap
Slide 15: Balance Sheet
Balance Sheet 15 Balance Sheet at June 30, 2020 ($ millions) Cash and cash equivalents $9.3 Unused operating line of credit $5.0 Total cash and access to credit $14.3 Long-term debt $30.0 Operating Leverage 3.05
Slide 16: Experienced Leadership Team with Strong Track Record
Experienced Leadership Team with Strong Track Record 16 David Charron Duncan McGregor Interim Chief Executive Officer & Chief Financial Officer Vice President, Engineering & Operations Duncan is a seasoned executive with 20 years of global experience in the David has more than 20 years of financial
Slide 17: Summary
Summary 17 Enterprise-Class Cloud, Colocation, and Connectivity One of Canada’s Largest Holders of Millimetre Wave Spectrum A Clear Growth Opportunity in 5G Fixed Wireless Access Financial Strength to Fund Growth Strategy Experienced Management Team Committed to Value Creation
Slide 18: Capital Markets Snapshot
Capital Markets Snapshot 18 Key Stats as of June 30, 2020 ($ millions) Stock symbol TSX: TGO Shares outstanding 16.7 million Price at August 7, 2020 $7.24 52-week low / high $4.00 / $10.99 Enterprise Value (“EV”) $137.1 million
Slide 19: Investor Relations
Investor Relations Matt Glover, Gateway Investor Relations Telephone: 949-574-3860 Email: TGO@gatewayir.com 19