Investor Presentation June 2019 ATGN Presented by: Jeremiah - - PowerPoint PPT Presentation
Investor Presentation June 2019 ATGN Presented by: Jeremiah - - PowerPoint PPT Presentation
Altigen Communications Investor Presentation June 2019 ATGN Presented by: Jeremiah Fleming, President & CEO Altigen Safe Harbor Statement This presentation contains forward-looking information. The statements are based on reasonable
Altigen Safe Harbor Statement
Confidential - Not for Distribution
This presentation contains forward-looking information. The statements are based on reasonable assumptions, beliefs and expectations of management and the Company provides no assurance that actual events will meet management's expectations. Furthermore, the forward-looking statements contained here-in are based on the Company's views of future events and financial performances which are subject to known and unknown risks and uncertainties, many of which are outside of the Company's control. There can be no assurances that the Company will achieve expected results, and actual results may be materially different than expectations and from those stated or implied in forward-looking statements. Please refer to the Company's most recent Annual Report filed with the OTCQB over-the-counter market for a further discussion of risks and uncertainties. Any forward-looking statement made by us in this presentation is based only on information currently available to us and speaks only as of the date on which it is made. The Company does not undertake any obligation to update any forward-looking statements.
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Altigen Communications Overview
Confidential - Not for Distribution
Provider of Unified Communications as a Service (UCaaS) Solutions based on the Microsoft Platform
Engineering: 27 SG&A: 19 Support: 9
Employee Distribution
Revenue Net Income Cash
$10.002 $1.148 $3.080
FY18 Financials
CEO, 15% Management, 12% Employees, 6% Private Investors, 67%
Stock Ownership
- Headquartered in Silicon Valley, California
- In Business for 20+ Years
- More than 2,500 Current Customers
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Altigen Summary Financials
Category 1H19 2H18 1H18 2H17 1H17
Total Revenue 5,319 5,228 4,774 4,222 4,166 Cloud Revenue 3,004 2,645 2,356 1,827 1,379 Net Income 1,015 9,119 721 310 69
- Adj. EBITDA*
1,169 1,071 754 405 151
- Adj. EPS
$0.05 $0.04 $0.03 $0.02 $0.01 Cash 4,721 3,080 4,243 3,876 3,830
Confidential - Not for Distribution
Net Operating Loss Carryforward:
- Federal: $52.6M*
- State: $22.7M*
Research & Development Tax Credits:
- Federal: $1.1M*
- State: :$700K
*expire at various dates through 2038
*Adjusted EBITDA is a non-GAAP measure that adds back non-cash expenses and one-time, non-recurring expenses 4
New Cloud Business Model Driving Growth
Confidential - Not for Distribution
The “Old” Altigen Revenue Model
- One-time, On Premises Sales
- Hardware-based Phone System
- Hardware Revenue > 90%
- No Recurring Revenue
- No Phone Service Revenue
The “New” Altigen Revenue Model
- Cloud & Monthly Recurring Revenue
- Software-based Phone System
- $0 Hardware Revenue
- 50%+ Cloud & 90% Total Recurring Revenue
- Includes Monthly Recurring Phone Service Revenue
On Premise => Cloud Glossary of Terms
On Premises: Installed at a Customer Location Cloud: Hosted in Altigen’s Datacenter SIP Trunks: Internet-based Phone Service PBX: Private Branch Exchange (Phone System) 5
Altigen’s Small to Medium Business (SMB) Cloud Model
Confidential - Not for Distribution
Unified Cloud Communications (UCC) Built on Altigen’s MaxCS Platform
Cloud Unified Communications Targeting the SMB Market
- Altigen MaxCS Deployed in the Cloud, Delivered as a Managed Service
- 3 Cloud Delivery Models Enables Altigen to Address the Large SMB Market
1) Hosted by ATGN
- Sold to End Customers by Altigen Reseller Partners
- Targeting New Customers and Altigen’s 1,750+ On Premises Customers
2) Hosted by Affiliated Technology Solutions
- Sold to Residential Services Companies (Pest Control, Lawn Care, HVAC, etc.)
- Targeting 3,000+ Residential Services Companies
3) Hosted by Fiserv
- Sold to Financial Services Organizations
- Targeting 13,500+ Community Banks and Credit Unions
MaxC axCS IP PBX MaxC axCS MaxC axCS & IVR
SIP Trunks
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Altigen’s Mid-Size Enterprise (MSE) Cloud Model
Confidential - Not for Distribution MaxA axACD App pplications
Phone System
SIP Trunks
Cloud Unified Communications Targeting the MSE Market
- Altigen Applications Deployed in the Cloud, Integrated with Microsoft
UC Solutions, Delivered as a Managed Service
1) Hosted Skype for Business
- Hosted and Managed by Altigen
- Sold by joint Altigen / Microsoft Reseller Partners
- Altigen Applications and SIP Trunk Services Add Value to Skype for Business
- Targeting Millions of Skype for Business Online and On Premises Users
2) Microsoft teams Phone System
- Teams Phone System Hosted by Microsoft and Managed by Altigen
- Sold by joint Altigen / Microsoft Reseller Partners
- Altigen Applications and SIP Trunk Services Add Value to Teams Phone System
- Targeting Millions of Office 365 / Teams Users
Unified Cloud Communications (UCC) Integrated with Microsoft’s UC Solutions
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Increasing Revenues based on Cloud Growth
1000 2000 3000 4000 5000 6000 7000 8000 9000 10000 FY15 FY16 FY17 FY18
FY15 – FY18
Cloud SA Software + Services Hardware
Confidential - Not for Distribution
Total Company Revenue by Category Increasing Cloud Revenues Driving Company Growth
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Cloud Subscriber Revenue by Category
Confidential - Not for Distribution
1000 2000 3000 4000 5000 6000
Skype for Business / Teams Hosted MaxCS SIP
Cloud Metrics FY15 FY16 FY17 FY18
# of Customers 156 302 434 576 Avg Revenue per Customer $ 428 $480 $586 $683 # of Subscribers 5,810 8,333 13,828 18,799 Avg Revenue per Subscriber $ 17.06 $17.41 $19.32 $20.92
Total Cloud Revenue by Category
FY15 – FY18 Consistent Growth in:
- Cloud Customers
- Cloud Subscribers
- Avg Revenue per Customer
- Avg Revenue per Subscriber
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Altigen Cloud Performance Metrics
Confidential - Not for Distribution
Gross Churn Rate 4.5%
GCR = Revenue Churn / (Beginning ARR + Ending ARR)/2
Lifetime Value $3,905
LTV = ARR x (Cloud Gross Margin / GCR)
LTV to CAC Ratio 15.7
LTV / CAC
Peer Comparison
Company EV / LTM Sales Cloud Growth Rate
RingCentral 13.3x 33% 8x8 6.2x 18% Five9 10.9x 27% Average 10.1x 26%
Altigen 2.2x 28%
Based on FY18 Results
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Altigen Business Strategy Summary
Key Strategies:
- Continue Monetization of Altigen’s on Premises Customer Base (i.e., Cloud Conversion)
- Emphasis on Vertical Market Solution Providers for IP PBX New Customer Acquisition
- Focus on Microsoft Teams / Office 365 to Drive UCaaS Growth (Direct and Channel)
- Execute on our Capital Allocation Framework
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