Slide 1: First Quarter 2019 Results
First Quarter 2019 Results Mr. Tim Ti, Chief Executive Officer Mr. Eric Lam, VP of Finance May 10, 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: Q1 2019 Financial Highlights
Q1 2019 Financial Highlights Q1 2019 Y/Y Change Q/Q Change Revenues $24.7 +9.1% +93.7% Gross Profit $7.0 -23.6% +21.2% Operating Expenses $7.3 +6.1% -12.3% Operating Income(Loss) -$0.3 -$2.6 +$2.2 Net Income $0.4 -$3.6 +$1.7 Basic earnings per share $0.01 -$0.10 +$0.05 Cash Balance (including Restri
Slide 4: Key Recent Operating Achievements
Key Recent Operating Achievements • Evaluation of 5G Transport Network Technologies with Major Telecom Carrier in China • Ramping goBox Business; Launched First 5G Smart Vending Machine • Cross-selling Activities with Strategic Partner TongDing are underway 4 5/10/2019 www.utstar.com ©2019 UTStarcom
Slide 5: Market Opportunity: 5G Transition
Market Opportunity: 5G Transition New products focused on delivering compelling benefits • SkyFlux UAR: Segment Routing Product Family Based on segment routing over IPv6 or MPLS data plane Integrated with FlexE as well as SDN platform SOO network Value proposition: o Scalability o Greater flex
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 SyncRing XGM30 Grand Master 4G 5G Sync requirements: Sync requirements: ±1.5µs 130ns to ±1.5µs SyncRing XBC510 GNSS Antenna Boundary Clock GNSS Antenna CO T-GM ePRTC IP Network T-BC T-BC T-GM SyncE/PTP support PRC T-BC DU (Cs) Fronthaul T-BCs Core Netman 6000 OM
Slide 8: Key Recent Operating Achievements
Key Recent Operating Achievements • Evaluation of 5G Transport Network Technologies with Major Telecom Carrier in China • Ramping goBox Business; Launched First 5G Smart Vending Machine • Cross-selling Activities with Strategic Partner (Tongding) are underway 8 5/10/2019 www.utstar.com ©2019 UTStarc
Slide 9: goBox
goBox • Smart vending machine automated cloud platform • Smoothly integrates with UT’s cloud platform shopping • 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 10: 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 11: Key Recent Operating Achievements
Key Recent Operating Achievements • Evaluation of 5G Transport Network Technologies with Major Telecom Carrier in China • Ramping goBox Business; Launched First 5G Smart Vending Machine • Cross-selling Activities with Strategic Partner (Tongding) are underway 11 5/10/2019 www.utstar.com ©2019 UTStar
Slide 12: Market Opportunity: Broadband Infrastructure
Market Opportunity: Broadband Infrastructure • Target markets: Japan, India, Asia Pacific • Demand drivers: • Low broadband penetration • Strong consumer demand for new broadband services • Japan • Transition from 10G to 100G metro networks continuing • Migrating to 5G • India • Strong market presen
Slide 13: 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 14: Revenue
Revenue • +9% y/y • +94% sequentially due to project fulfillment 60.0 52.1 50.0 40.0 31.5 30.0 28.5 26.0 24.7 22.6 20.0 18.2 12.7 10.0 0.0 2017 Q2 2017 Q3 2017 Q4 2018 Q1 2018 Q2 2018 Q3 2018 Q4 2019 Q1 Revenue($M) 14 5/10/2019 www.utstar.com ©2019 UTStarcom, Inc. All rights reserved.
Slide 15: Gross Profit and Gross Margin
Gross Profit and Gross Margin • Gross profit: down 26% y/y and up 21% sequentially • Gross margin: lower margin reflects product and geographic mix 12.0 50.0% 45.3% 10.6 9.9 45.0% 40.5% 40.5% 10.0 9.1 40.0% 8.9 35.0% 8.0 7.5 7.0 30.0% 28.3% 28.3% 25.0% 26.2% 6.0 5.8 25.0% 4.6 19.0% 20.0% 4.0 15.0% 1
Slide 16: Operating Expense/Operating Income (Loss)
Operating Expense/Operating Income (Loss) • SG&A expenses were flat y/y • R&D expenses grew 14%, which reflected our continuing investment in 5G technologies and product development 9.0 5.0 8.3 8.0 7.5 4.1 7.2 7.0 7.3 4.0 7.0 6.5 6.8 3.1 3.0 6.0 5.8 2.3 2.0 1.7 5.0 4.0 1.0 0.5 3.0 0.0 2017 Q2 2017 Q
Slide 17: Net Income (Loss) and EPS
Net Income (Loss) and EPS • Returned to profitability from Q4 2018 • Benefited from a currency translation gain due to the appreciation of Renminbi and India Rupee against the dollar 5.0 0.15 4.0 0.11 4.0 0.10 3.0 2.4 0.07 2.2 0.06 0.06 2.1 2.0 0.05 0.01 1.0 0.4 - - 2017 Q2 2017 Q3 2017 Q4 2018 Q1 2
Slide 18: Cash Flow
Cash Flow • Cash used in • Operating activities $8.5M • Investing activities $0.3M • Financing activities $0.2M • Quarter-end cash and equivalents $64.1M 18 5/10/2019 www.utstar.com ©2018 UTStarcom, Inc. All rights reserved.
Slide 19: Q2 2019 Outlook
Q2 2019 Outlook • Revenue $13 to $17 million • Quarterly revenue typically correlates with timing of project fulfillment 19 5/10/2019 www.utstar.com ©2019 UTStarcom, Inc. All rights reserved.
Slide 20: 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