Slide 1: 2014 Year End Earnings Conference Call
2014 Year End Earnings Conference Call February 25, 2015
Slide 2: Forward-looking statements
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 such statements are made purs
Slide 3: Stewart Lyons, President & Chief Executive Officer
Stewart Lyons President & Chief Executive Officer
Slide 4: TeraGo Product Set
TeraGo Product Set o TeraGo provides B2B IT services across Canada on three pillars: Access • Access services Speeds/Feeds • Data center services Redundancy • Cloud services Managed Services o Three core strengths of TeraGo Voice Over IP include: • Large existing base of over 4,000 SMB and small ent
Slide 5: 2014 Transformation
2014 Transformation January 2014 January 2015 Wireless ISP “Data Flow” Provider “Alternative” Access Primary Secure Data Provider Provider Geographic Targeting Vertical Targeting Price vs. Competition Value vs. Alternative PRODUCT SALE SOLUTION SALE Shift in TeraGo’s Approach to Customers – Focus on
Slide 6: 2014 Product Introductions
2014 Product Introductions Cloud Storage Cloud Compute Unstructured object store via an on premise On demand virtual servers to utilize Safety & cache appliance CPUs and RAM Security Offerings Active Redundancy / Data Center Hot Seats Failover Solutions Managed Services High Capacity Services Bandwi
Slide 7: Net Promoter Score
Net Promoter Score o Introduction of Net Promoter Score (“NPS”) as a metric tied to compensation • NPS used to measure, understand, and improve customer experience o TeraGo’s NPS of +19 is higher than average and significantly outperforms our competition Net Promoter Score(1)(2) % of Respondents Ter
Slide 8: 2014 Highlights
2014 Highlights o Launch of cloud, additional products and feature enhancements; positioning TeraGo as an end-to-end provider of fully-managed data connectivity and cloud solutions o Expanded its data center business through 3 acquisitions • Servicing Western Canada by two facilities in downtown Van
Slide 9: Joe Prodan, Chief Financial Officer
Joe Prodan Chief Financial Officer
Slide 10: Operating Metrics
Operating Metrics o Key operating metrics improved in 2014 • Eliminated entry-level Access product set with low price points (ARPU <$250) • Impacted lower ARPU customer base • Significant improvement in churn year over year • Two consecutive quarters of ARPU increases beginning in Q3’14 • ARPU impro
Slide 11: Revenue & EBITDA
Revenue & EBITDA Revenue ($ millions) Q4’14 $12.9 $12.9 $13.2 $12.5 $12.6 o Monthly recurring service revenue from $12.3 ongoing operations has increased by $200k $12.1 in Q4’14 as a result of Access improvements $12.0 $12.0 $12.0 and continued growth in data center services • Decline in total reven
Slide 12: Capital Expenditures
Capital Expenditures Capital Expenditures ($ millions) Q4’14 o Relatively stable capital expenditures Access compared to Q3’14 after excluding Data Center / IT / Facility extraordinary capital expenditures Extraordinary Items • Construction costs related to Head Office move o Capital intensity decre
Slide 13: Objectives / Strategic Priorities
Objectives / Strategic Priorities o Transition into a comprehensive multi-product end-to-end IT services provider to drive growth in the future • TeraGo Cloud Services launched towards the end of Q3; initial results supports cross-selling plan as multiple services being purchased • Over 40,000 squar