Vecima Networks Inc. · TSX:VCM

Vecima Networks — Q3 FY2022 Earnings Presentation

43 slides from Vecima Networks's earnings presentation, May 2022

1. Slide 1: Fiscal Year 2022 Q3 Results

   Fiscal Year 2022 Q3 Results Quarterly Investor Call May 2022 March 2022 Ending Results Incorporated © 2022 Vecima Confidential & Proprietary Information

2. Slide 2: Safe Harbour

   SAFE HARBOUR Forward-Looking Statements Certain statements in this presentation may constitute forward-looking statements within the meaning of applicable securities laws. All statements other than statements of historical fact are forward-looking statements. These statements include, but are not li

3. Slide 3: Three Trends Drive Our Investments

   Three Trends Drive Our Investments High-Speed Data Video Conferencing and OTT Enterprise Market for Bundled rates will increase to 10Gbps+ Delivered Video will continue Data & IP Video Solutions will be over the next 5-10 years to grow at high rates critical to MSO/BSP offerings 50% Annual Growth Au

4. Slide 4: Q3 FY2022 Highlights

   Q3 FY2022 Highlights $CAD Record Revenue: Record Gross Gross Margin: $50.9M (up 60% Profit: $24.0M (up 47.1%, Cash YoY and 17% 67% YoY and 10% Balance: $10.6M QoQ) QoQ) Record VBS sales Adjusted EBITDA CDS sales of climbing 70% YoY of $8.1M up 314% $12.5M, up 43% & 36% QoQ to YoY and 9% QoQ YoY and

5. Slide 5: Vecima's Competitive Edge

   Vecima’s Competitive Edge Most Industry- Most Open & Widest Solution Global Sales Team Credibility in Focused Vendor Interoperable Ecosystem / Momentum Market in Market Cable Scale Invented Flexibility $350M+ R&D Fiber Knowledge Developed = Accumulated IP Video Support Deployed Design Wins over 7 ye

6. Slide 6: Company Market Opportunity

   INDUSTRY- MARKET COMPANY LEADING OPPORTUNITY TECH OPERATIONAL FINANCIAL LEADERSHIP EXCELLENCE PERFORMANCE © 2022 Vecima Confidential & Proprietary Information 6

7. Slide 7: Three Business Segments

   Three Business Segments 30+ Years of Innovation & VIDEO & CONTENT Profitability BROADBAND DELIVERY & TELEMATICS 548 SOLUTIONS STORAGE Employees 73% 24% 3% 68% Engineers / R&D 10 Service Provider infrastructure for IPTV software and systems GPS-based fleet management Offices Globally gigabit broadban

8. Slide 8: Company Market Opportunity

   MARKET INDUSTRY- COMPANY OPPORTUNITY LEADING TECH OPERATIONAL FINANCIAL LEADERSHIP EXCELLENCE PERFORMANCE © 2022 Vecima Confidential & Proprietary Information 8

9. Slide 9: Global Broadband Demand Continues to Explode

   Global Broadband Demand Continues to Explode Global IP Traffic Global Broadband Speeds 450 Exabytes per Month 400 21% CAGR Other 350 27% CAGR 28% CAGR 300 Download Upload 250 200 150 82% 100 IP Video 50 - 2017 2018 2019 2020 2021 2022 Source: Cisco VNI Global Traffic Forecast, 2017-2022 & 2018-2023

10. Slide 10: The Bandwidth Wars are Back!

    The Bandwidth Wars are Back! The Last Mile The 5G Mobile Last Mile Company Achieves a AT&T will expand its fiber Live Network With footprint to 3M additional 1.25Gbps Speed Up locations this year. and Down Charter launches $5 billion Google Fiber 2-Gig initiative to expand broadband service goes liv

11. Slide 11: Huge and Growing Rural Broadband Investment

    Huge and Growing Rural Broadband Investment Rural Digital Opportunity American Jobs Plan Universal Broadband Fund Fund $20.4B USD to: $100B USD to: $2.75B CAD to: • Build out rural fiber in US over 10 years • Build high-speed broadband US • Support high-speed internet projects • Many Vecima customer

12. Slide 12: Cable & Fiber Access Market Opportunity

    Cable & Fiber Access Market Opportunity $3,000.0 All Cable and Fiber Access $2.76B Operators currently spending over $2.2B $2,500.0 $1.96B Legacy fiber (<10Gbps PON) $2,000.0 Legacy cable (CCAP) $1,500.0 $1,000.0 Next-gen fiber (10Gbps PON) $500.0 Distributed cable (DAA) $0.0 2020 2021 2022 2023 202

13. Slide 13: Cable & Fiber Access Market Opportunity

    Cable & Fiber Access Market Opportunity $3,000.0 All HFC and PON Access DAA & 10Gbps PON $2.76B $2,500.0 1st Tier 1 Nokia CBU Market Share New Product Win Acquisition Expansion Generations $2B $2,000.0 $1,500.0 $1,000.0 Serviceable Market Target $594M market $500.0 share of $594M ~25% $0.0 2020 2021

14. Slide 14: Company Market Opportunity

    INDUSTRY- MARKET COMPANY LEADING OPPORTUNITY TECH OPERATIONAL FINANCIAL LEADERSHIP EXCELLENCE PERFORMANCE © 2022 Vecima Confidential & Proprietary Information 14

15. Slide 15: Network Architectures are Evolving

    Network Architectures are Evolving CORE EDGE COMMERCIAL HOME MDU DATA CENTER HOME HUB © 2022 Vecima Confidential & Proprietary Information 15

16. Slide 16: Network Architectures are Evolving

    Network Architectures are Evolving CORE EDGE COMMERCIAL Today, there are ~1 million nodes deployed. HOME Expected to increase 4x to 4+ million nodes by 2025 MDU DATA CENTER HOME HUB © 2022 Vecima Confidential & Proprietary Information 16

17. Slide 17: Network Architectures are Evolving

    Network Architectures are Evolving Current COMMERCIAL Future U.S. Tier 1 Example 2M SMBs 275K Enterprise HOME MDU DATA CENTER HOME HUB 21 Data Centers 50M+ Homes passed 30M+ Homes served 2,000 180,000 © 2022 Vecima Confidential & Proprietary Information Hubs Nodes 17

18. Slide 18: Network Architectures are Evolving

    Network Architectures are Evolving Current COMMERCIAL Network utilization & Future increased speed 2M SMBs 275K Enterprise requirements HOME DRIVE NODE GROWTH MDU DATA CENTER HOME HUB 21 Data Centers 50M+ Homes passed 30M+ Homes served 2,000 180,000 700,000 © 2022 Vecima Confidential & Proprietary I

19. Slide 19: Network Architectures are Evolving

    Network Architectures are Evolving Current COMMERCIAL Vecima’s technology drives a Future 2M SMBs 5x reduction in real estate & 275K Enterprise power utilization HOME MDU DATA CENTER HOME HUB 21 Data Centers 50M+ Homes passed 30M+ Homes served 2,000 5,000 1,000 180,000 700,000 © 2022 Vecima Confiden

20. Slide 20: Legacy Architectures Do Not Scale

    Legacy Architectures Do Not Scale Current limitations COMMERCIAL  “Big Iron”  Cable-specific  Difficult to scale  Space-power intensive “Big Iron” HOME Devices MDU DATA CENTER HOME HUB 2,000 1,000 180,000 700,000 © 2022 Vecima Confidential & Proprietary Information Hubs Nodes 20

21. Slide 21: A Next-Generation Approach is Required

    A Next-Generation Approach is Required X COMMERCIAL Centralized Distributed Control Processing “Big Iron” HOME Devices MDU DATA CENTER HOME HUB 2,000 1,000 180,000 700,000 © 2022 Vecima Confidential & Proprietary Information Hubs Nodes 21

22. Slide 22: Next-Generation Distributed Access Architecture

    Next-Generation Distributed Access Architecture COMMERCIAL  Central control  Automated services Cloud-based  Cloud-based HOME Centralized Control  Highly scalable MDU DATA CENTER HOME HUB  Edge processing  Leverage Cable & Fiber for 10G Distribute  Highly modular growth Processing © 2022 Veci

23. Slide 23: Significant Service Quality & Financial Benefits

    Significant Service Quality & Financial Benefits Improved Network Fidelity Access Controller SDU Signal Quality Signal QualitySpeed to Market Increased DATA CENTER Revenue SDU HUB Truck Rolls Service QualityReduced TruckSpeed Rolls R-MACPHY R-PHY Lower Real Estate & Power Savings OpEx MDU Decreased

24. Slide 24: Advanced IP Video Delivery

    Advanced IP Video Delivery PACKAGE  Central control COMMERCIAL FORMAT  Ingest & package video ADAPT TRANSCODE ORIGIN  Convert legacy to CLOUD IP video VIDEO GATEWAY HOME STORAGE MDU DATA CENTER HOME HUB  Edge processing STREAM  Video streaming CACHE  Highly scalable © 2022 Vecima Confidential

25. Slide 25: Significant Service Quality & Financial Benefits

    Significant Service Quality & Financial Benefits Enhance CPE FORMAT Reclaim Bandwidth PACKAGE ORIGIN  Central control COMMERCIAL  Ingest & package video TRANSCODE CLOUD CONVERT  Convert Internet legacy to HOME Internet STORAGE IP video VIDEO GATEWAY Self-install 25% 100% 75% Lower cost DATA CENTE

26. Slide 26: Strategically Positioned and Aligned

    Strategically Positioned and Aligned Data Center Hub OSP Users LIVE - VOD - DVR MULTI-TIER CACHE TV / STB MSX MSX ORIGIN MSX TRANSCODE CACHE IP VIDEO DELIVERY LAPTOP MSX STORAGE ACCESS CONTROL & CABLE ACCESS NODES DAA VIDEO AND AGGREGATION HOTELS COMMERCIAL VIDEO ENTRA ACCESS CONTROLLER TABLET CABLE

27. Slide 27: Competitive Landscape

    Competitive Landscape (in scope order) Next-Generation Next-Generation IP Video Commercial Cable Access Fiber Access Distribution Video IP Gateways Vecima 4 4 4 4 Competitor 1 3 2 2 0 Competitor 2 3 1 3 0 Competitor 3 2 3 0 0 Competitor 4 0 4 0 0 Competitor 5 0 4 0 0 Competitor 6 0 0 0 3 Competitor

28. Slide 28: Company Market Opportunity

    INDUSTRY- MARKET COMPANY LEADING OPPORTUNITY TECH OPERATIONAL FINANCIAL LEADERSHIP EXCELLENCE PERFORMANCE © 2022 Vecima Confidential & Proprietary Information 28

29. Slide 29: 30+ Years of Global Relationships

    30+ Years of Global Relationships 30+ Years of Innovation & Profitability 548 Employees 68% Engineers / R&D 10 Offices Globally 3 Business Segments 6 Continents with Deployments © 2022 Vecima Confidential & Proprietary Information 29

30. Slide 30: Cable & Fiber Engagement Tracking

    Cable & Fiber Engagement Tracking (as of FY’22 Q3) CUSTOMER ORDER GROWTH CUSTOMER ENGAGEMENT GROWTH ENGAGEMENTS BY PRODUCT Consistent Quarterly Expanding Global Customer Balanced Product Customer Order Growth Engagements Engagements © 2022 Vecima Confidential & Proprietary Information 30

31. Slide 31: Significant Progress with New Products

    Significant Progress with New Products FY’20 Q1 vs FY’22 Q3 New Product Introduction 159% 60% Top Line Revenue Growth of Revenue FY’20 Q1 v FY’22 Q3 Attributed to Cable & Fiber Access © 2022 Vecima Confidential & Proprietary Information Units: CAD 31

32. Slide 32: Company Market Opportunity

    INDUSTRY- MARKET COMPANY LEADING OPPORTUNITY TECH OPERATIONAL FINANCIAL LEADERSHIP EXCELLENCE PERFORMANCE © 2022 Vecima Confidential & Proprietary Information 32

33. Slide 33: Financial Highlights

    Financial Highlights Annual Revenue ($M) Gross Margin ($M) Adjusted EBITDA ($M) Concurrent Nokia Cable BU Accelerating Annual Acquisition Acquisition Revenue Growth Jan 1, 2018 Aug 7, 2020 Quarterly Revenue ($M) Gross Margin ($M) Adjusted EBITDA ($M) >10% Average Quarterly Growth Rate Nokia Cable BU

34. Slide 34: Vecima Financial Overview

    Vecima Financial Overview As at • Recent Market Cap of ~$395M C$ March 31, 2021 (as at April 22, 2022) • Solid Balance Sheet Cash & ST Investments $10.6M • Quarterly Dividends ($38.7M returned to shareholders since Working Capital $54.9M October 2014) Total Assets $251.1M Long-term Debt $15.1M Basic

35. Slide 35: Company Market Opportunity

    INDUSTRY- MARKET COMPANY LEADING OPPORTUNITY TECH OPERATIONAL FINANCIAL LEADERSHIP EXCELLENCE PERFORMANCE © 2022 Vecima Confidential & Proprietary Information 35

36. Slide 36: Vecima Leadership Team

    Vecima Leadership Team DALE BOOTH DEAN ROCKWELL SUMIT KUMAR CHIEF FINANICAL EXECUTIVE VICE PRESIDENT AND CEO OFFICER PRESIDENT Over 25 years of C-level, Over 30 years of senior Over 30 years of executive and technical management experience in experience in c-level and experience, including finance,

37. Slide 37: Board of Directors

    Board of Directors DR. SURINDER KUMAR SUMIT KUMAR T. KENT ELLIOTT CHAIRMAN OF THE PRESIDENT AND CEO INDEPENDENT BOARD Over 25 years of C-level, DIRECTOR Founder of Vecima executive and technical Former CEO and Networks experience, including Executive Vice-Chairman senior management at ForeScout posi

38. Slide 38: Leading Industry Innovation

    Leading Industry Innovation Dell’Oro Group Vecima Announces Recognizes Vecima Flexible MAC Networks as 2021 Vecima Announces Architecture (FMA) Scalable Software Vecima Redefines Market Share Leader Interoperability Enhancements for Commercial Video in Two Growing DAA with Industry- its Entra Remote

39. Slide 39: Winning Momentum with Customers

    Winning Momentum with Customers Vecima Demonstrates Elisa and Vecima Supercharge DOCSIS® 4.0 Leadership at Cable Network with DAA to CableLabs 10G Showcase Deliver Gigabit Access to Subscribers in Finland © 2022 Vecima Confidential & Proprietary Information 39

40. Slide 40: Growing Global Reach

    Growing Global Reach • DOCSIS 4.0 speed test demonstration • HFC’s Multi-Gigabit Future, featuring Remote MACPHY • PON fiber access • TruLiveTM Low Latency HLS Video © 2022 Vecima Confidential & Proprietary Information 40

41. Slide 41: Key Takeaways

    Key Takeaways Global leader in IP Video Delivery and Cable & Fiber Access with a market-leading portfolio Strong industry dynamics – broadband demand; shift to Distributed Access underway; $2 billion per year market opportunity Recent acquisitions have advanced Company’s product offering, positionin

42. Slide 42: Contact Vecima

    CORPORATE HEAD OFFICE: U.S. OFFICE: MANUFACTURING FACILITY: 771 Vanalman Avenue, 4375 River Green Parkway, Suite 100 150 Cardinal Place Victoria, BC, Canada V8Z 3B8 Duluth, GA, USA 30096 Saskatoon, SK, Canada S71 6H7 Tel: (250) 881-1982 Tel: (678) 258-4112 Tel: (306) 955-7075 Fax: (250) 881-1974 Fax

43. Slide 43: Thank You

    Thank You © 2022 Vecima Confidential & Proprietary Information 43

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