Slide 1: Second Quarter 2018 Results
Second Quarter 2018 Results Mr. Tim Ti, Chief Executive Officer Mr. Eric Lam, VP of Finance August 3, 2018 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 2018 Financial Highlights
Q2 2018 Financial Highlights Q2 2018 Y/Y Change Q/Q Change Revenues $28.5 -9.4% +26.3% Gross Margin 26.2% -2.1% -14.3% Operating Expenses $7.0 -2.7% +2.1% Operating Income $0.5 -$1.3 -$1.8 Net Income (Loss) -$0.1 -$2.5 -$4.1 Basic EPS -$0.00 -$0.07 -$0.11 Cash Balance (Including $80.5 -27.7% -18.6%
Slide 4: Key Business Highlights
Key Business Highlights SRv6 Router Product Line • New routers are based on segment routing (SR) over IPv6 data plane (SRv6) integrated with SDN platform SOO network • SRv6 is a breakthrough networking technology, offering greater scalability and flexibility, at the same time simplifying networks •
Slide 5: Key Business Highlights – Softbank World 2018
Key Business Highlights – Softbank World 2018 • UTStarcom is the Diamond sponsor of the event • Key Message: Enabling network evolution • Our major focus during the event was on several key areas enabling network evolution towards support of 5G, IoT, M2M, etc.: • Next generation-packet optical techn
Slide 6: Key Business Highlights – Network Evolution 2018
Key Business Highlights – Network Evolution 2018 • Network Evolution 2018 - Live Demonstration 1. Network Evolution with SRv6 • UTStarcom-hosted event in our office in Tokyo 1-1. L3VPN over SRv6 network 1-2. SRv6 data plane: SRH, network programming / TE • Demonstration of the latest technologies en
Slide 7: SyncRing
SyncRing 4G/5G-ready Synchronization SyncRing XGM Grand Master 4G 5G Sync requirements: Sync requirements: ±1.5µs ±260ns to ±1.5µs SyncRing XBC510 GNSS Antenna GNSS Antenna Boundary Clock CO T-GM ePRTC IP Network T-BC T-BC T-GM SyncE/PTP support PRC T-BC DU (Cs) Fronthaul T-BCs Core DU Netman 6000 O
Slide 8: SkyFlux UAR: SRv6 Routers Family
SkyFlux UAR: SRv6 Routers 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 scalabili
Slide 9: Key Technologies for 5G Network
Key Technologies for 5G Network Segment Routing(SR): Clock Synchronization: 01 Segment Routing ① A new forwarding paradigm New tunneling technology in packet ② Source routing technology ① Sync over packet NW NW base on sourcing routing ③ Simplify MPLS networks ② Distributed GM clock ④ Great match SD
Slide 10: Key Business Highlights Retail Store Automation
Key Business Highlights Retail Store Automation • Formed a JV with a leading Chinese refrigerator manufacturer • goBox Platform to integrate leading-edge technologies: • AI features including: • Facial recognition • Image analysis • Behavior identification • Integrated load and image sensing • Cloud
Slide 11: goBox
goBox • A smart commercial refrigerator automated cloud • Smoothly integrates with UT’s cloud platform shopping platform • Uses load and image recognition, sensors and big data for streamlined big data automated shopping experience image • goBox is getting market traction sensors recognition • Initi
Slide 12: Key Business Highlights
Key Business Highlights India Business • India continues to be a key market • Business remains robust • Several major projects are underway • UT expects to expand its market share for broadband internet network equipment in the region China Business • Evaluating opportunities in the China market • I
Slide 13: Revenues
Revenues • Revenues in Q2 2018 were $28.5 million, compared to $31.5 million in Q2 2017 and $22.6 million in Q1 2018 • Equipment sales in Q2 2018 were $24.1 million, compared to $26.2 million in Q2 2017 35.0 31.5 30.0 28.5 27.5 26.0 25.0 22.5 22.6 20.0 18.2 16.4 15.0 10.0 5.0 0.0 2016 Q3 2016 Q4 201
Slide 14: Gross Profit
Gross Profit • Gross profit in Q2 2018 was $7.5 million, compared to $8.9 million in Q2 2017 and $9.1 million in Q1 2018 • Equipment gross profit in Q2 2018 was $6.2 million, compared to $7.5 million in Q2 2017 12.00 10.6 10.1 10.00 9.1 8.9 9.1 8.00 7.5 6.00 4.6 4.0 4.00 2.00 0.00 2016 Q3 2016 Q4 20
Slide 15: Gross Margin
Gross Margin • Gross margin in Q2 2018 was 26.2%, compared to 28.3% in Q2 2017 and 40.5% in Q1 2018 • Equipment gross margin in Q2 2018 was 25.6%, compared to 28.6% in Q2 2017 45.0% 40.4% 40.5% 40.5% 40.0% 36.5% 35.0% 30.0% 28.3% 26.2% 24.3% 25.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 2016 Q3 2016 Q4 20
Slide 16: Operating Expenses
Operating Expenses • Operating expenses in Q2 2018 were $7.0 million, compared to $7.2 million in Q2 2017 and $6.8 million in Q1 2018 • R&D expenses in Q2 2018 were $2.8 million, up from $2.3 million in Q2 2017. The increase was largely due to continuing investment in R&D 8.0 7.5 7.2 7.0 7.0 6.8 6.3
Slide 17: Operating Income (Loss)
Operating Income (Loss) • Operating income in Q2 2018 was $0.5 million, compared to $1.7 million in Q2 2017 and $2.3 million in Q1 2018 • Operating margin in Q2 2018 was 1.7%, compared to 5.5% in Q2 2017 5.0 3.8 3.6 4.0 3.1 3.0 2.3 2.0 1.7 1.0 0.5 0.0 -1.0 -2.0 -1.4 -1.9 -3.0 2016 Q3 2016 Q4 2017 Q1
Slide 18: Net Income (Loss)
Net Income (Loss) • Net loss in Q2 2018 was $0.1 million, compared to a net income of $2.4 million in Q2 2017 and a net income of $4.0 million in Q1 2018 8.0 5.9 6.0 4.0 4.0 2.4 2.2 2.0 - -0.1 -2.0 -1.8 -1.6 -4.0 -3.6 -6.0 2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2018 Q1 2018 Q2 Net Income (l
Slide 19: Earnings Per Share
Earnings Per Share • Basic net loss per share in Q2 2018 was $0.00, compared to basic net income per share of $0.07 in Q2 2017 and basic net income per share of $0.11 in Q1 2018 0.20 0.17 0.15 0.11 0.10 0.07 0.06 0.05 - (0.00) (0.05) (0.05) (0.05) (0.10) (0.10) (0.15) 2016 Q3 2016 Q4 2017 Q1 2017 Q2
Slide 20: Cash Flow
Cash Flow • The Company held $80.5 million in cash, cash equivalents and restricted cash as of June 30, 2018, compared to $98.9 million as of March 31, 2018 • Cash used in operating activities was $13.7 million in Q2 2018 • Cash used in investing activities was $1.8 million in Q2 2018 • Cash used in
Slide 21: Q3 2018 Outlook
Q3 2018 Outlook • Earnings results in the third quarter will be driven by the ongoing fulfillment of large projects in India. These projects should result in strong revenue growth, but at reduced gross margin relative to the second quarter of 2018 • For the third quarter, the Company expects to gene
Slide 22: 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
Slide 23: Thank you !
Thank you !