Aviat Networks, Inc. · NASDAQ:AVNW
Aviat Networks — Q1 2020 Earnings Presentation
27 slides from Aviat Networks's earnings presentation, Nov 7, 2019
Slide 1: FY20 First Quarter Results Update
AVIAT NETWORKS AVIAT NETWORKS (NASDAQ: AVNW) GENERAL FY20 First Quarter ResultsUPDATE – Investor Presentation MWC 2019 AVIAT NETWORKS
Slide 2: Forward-Looking Statements
Forward-Looking Statements The information contained in this presentation includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 21E of the Securities Exchange Act and Section 27A of the Securities Act, including expectations regarding
Slide 3: Exploding Demand for Data
Exploding Demand for Data +79% Mobile data traffic grew close to 79 percent year-on-year in Q3 2018, the 77.5 Exabytes/month highest growth rate since 2013. (Ericsson Globally, mobile data traffic will increase Mobility Report, 2018) sevenfold between 2017 and 2022. Mobile data traffic will grow at
Slide 4: The Leading Experts In Wireless Transport Solutions
The Leading Experts In Wireless Transport Solutions We provide wireless transport solutions to Exchange NASDAQ Global Select Communications Service Providers and Private Network Operators Ticker AVNW Shares ~5.4 million We help our customers lower their total cost of outstanding ownership (TCO), sim
Slide 5: What Makes Aviat an Attractive Investment Opportunity?
What Makes Aviat an Attractive Investment Opportunity? Compelling Market Opportunity 1 Favorable Industry Dynamics – Major market trends create significant opportunities for near and long-term growth Credible & Established Leader 2 Global Customer Footprint, Strong Relationships, Proven Track Record
Slide 6: Compelling Market Opportunity
Compelling Market Opportunity 6 NOVEMBER 2019 AVIAT NETWORKS
Slide 7: Major Trend: The 5G Future
Major Trend: The 5G Future 5G Tower Trends Source: Ovum Microwave Forecast Expenditure ($m) “5G use cases will require network performance to increase 10-fold over current levels across all network parameters. To get there, mobile operators must invest in all network domains, including spectrum, rad
Slide 8: Major Trend: More Critical Communications
Major Trend: More Critical Communications Industrial IoT IOT $500B Industrial IoT market by 2020 (Accenture) Driving more critical bandwidth in vertical markets Private LTE $16B for Private LTE by 2025 (ABI Research) LTE Paving way for 5G services in vertical markets Public Safety & Security CAGR 13
Slide 9: Credible and Established Leader
Credible and Established Leader 9 NOVEMBER 2019 AVIAT NETWORKS
Slide 10: Diverse, Stable Business, with Growth Potential
Diverse, Stable Business, with Growth Potential Based on FY2019 LATAM North EMEA and Asia America Service Pacific Provider Private 54% 27% 53% 19% 47% Geographical diversity Vertical diversity Presence in all geographies, strongest in high-margin regions Positive momentum in both verticals AviatClou
Slide 11: Capitalizing on Critical Communications
The clear choice: Global Partners Expanding Capitalizing on Segment leader in Security & Reach – Recent Defense breakthrough Critical Communications Trends National Security Oil & Gas Regional Networks Governments Specialization and France West Africa Across all regions: Middle East Asia NA, LATAM,
Slide 12: Some Recent Momentum in Private Networks
Some Recent Momentum in Private Networks Aviat Networks Aviat Networks Wins Awarded Microwave ~$20 Million in U.S. Business with State Utility Business of Alaska Aviat Awarded Aviat Awarded Microwave and Nearly $40M in IP/MPLS Business Business with the by the State of State of Colorado Nevada Aviat
Slide 13: Capitalizing on the 5G Trend: Transport Deployments Started
Capitalizing on the 5G Trend: Transport Deployments Started Across Customer Footprint Aviat Receives Orders from a Top-5 U.S. Wireless Carrier for 5G Transport Aviat Networks Signs Global Frame Agreement with Ooredoo Group Globe Telecom Selects Aviat’s WTM 4800 Multi-Band Solution to Support 5G Depl
Slide 14: Innovative Solutions
Innovative Solutions 14 NOVEMBER 2019 AVIAT NETWORKS
Slide 15: Industry-Leading Transport Solutions
Industry-Leading Transport Solutions For High Capacity, Lifecycle Automation, & Recurring Revenue Models AviatCloud Professional Services & Multi-Year, Subscription- Wireless Routing Automation and Based Offerings Solutions Solutions SDN Solutions 15 NOVEMBER 2019 AVIAT NETWORKS
Slide 16: Unique Ability to Address Multiple Vertical Markets
SDN-Based Management Multi-Gigabit Microwave Solutions for Network-Wide for 5G-Ready Mobile Operations Simplification Backhaul Unique Ability to Zero Footprint, AviatCloud Integrated Microwave Address Routing Solutions for Enterprise Access Multiple Vertical SDN-Based Wireless Solutions: Best TCO fo
Slide 17: Accelerating Digital Transformation
Accelerating Digital Transformation 17 NOVEMBER 2019 AVIAT NETWORKS
Slide 18: Opportunity: Automation and AI
Opportunity: Automation and AI Services & Operational Innovation Support Excellence Enhanced services Understand market Rapid deployment of profitability opportunities faster: rapid Continuous Improvement deployment of differentiated solutions and tools to New recurring revenue improve return on cap
Slide 19: Financials: Profitable, Investing in Growth
Financials: Profitable, Investing in Growth 19 NOVEMBER 2019 AVIAT NETWORKS
Slide 20: Historical Performance
Historical Performance ($’s million) Total Revenue Non-GAAP Gross Margin $280 35% 31.4% 33.1% 32.5% $268.7 30% $270 24.9% $260 25% 20% $250 $241.9 $242.5 $243.9 15% $240 10% $230 5% $220 0% FY16 FY17 FY18 FY19 FY16 FY17 FY18 FY19 ($’s million) Non-GAAP Operating Expenses ($’s million) Adjusted EBITD
Slide 21: FY20 Q1 Non-GAAP Financial Highlights
Year-Over-Year Comparison ($’s in millions) Q1 FY20 Q1 FY19 +900 FY20 Q1 Actual Actual bps Revenue $58.6 $60.5 Non-GAAP Gross Margin % 38.6% 29.6% +$3.5M Financial Operating Expenses $19.5 $18.3 Highlights Operating Income (loss) $3.1 $(0.4) Adjusted EBITDA $4.1 $0.9 +$3.2M Sequential Comparison Q1
Slide 22: FY20 First Quarter Financial Results – YOY Comparisons
FY20 First Quarter Financial Results – YOY Comparisons ($’s million) Total Revenue Non-GAAP Operating Income $70 $60.5 $4 $58.6 $3.1 $60 $50 $3 $40 $2 $30 $20 $1 $10 -$0.4 $0 $0 Q1 - FY19 Q1 - FY20 -$1 Q1 - FY19 Q1 - FY20 Non-GAAP Gross Margin Adjusted EBITDA 50% $5 38.6% $4.1 40% $4 29.6% 30% $3 20
Slide 23: Balance Sheet Highlights
($’s in millions, except Q1 FY20 Balance Sheet for DSO, DPO and turns) Actual Cash and Cash Highlights Equivalents $34.5 Accounts Receivable $43.2 +$2.5M DSO’s 67 since FY19 YE DSO’s with Unbilled 114 Accounts Payable $31.8 On track to generate cash in FY20 Strong cash conversion cycle DPO’s 80 Soli
Slide 24: FY20 First Quarter Financial Results – Take-Aways
FY20 First Quarter Financial Results –Take-Aways • Revenue down modestly as expected, primarily due to declines in international markets, offset by significant growth in North America (up over 40% YOY) • Non-GAAP gross margins of 38.6% increased by 900 basis points and represented historical bests f
Slide 25: Reiterating FY20 First Half Guidance
Reiterating FY20 First Half Guidance Revenue Stronger Bottom-Line Down Gross Improvements Modestly Margins Strong growth in North Affirming prior guidance: Mix shift, efficiencies and America offset by declines Non-GAAP operating higher-margin business in Africa as noted, but with income of ~$6 mill
Slide 26: Well Positioned In FY20 and Beyond
Well Positioned In FY20 and Beyond Foundation Continues to Improve / Balance Sheet Remains Strong North America business is growing Competitive position continues to strengthen Investments in R&D driving competitive differentiation; 5G opportunities ahead of us Operational excellence programs genera
Slide 27: WWW.AVIATNETWORKS.COM
Aviat NETWORKS DOGOO WWW.AVIATNETWORKS.COM