altigen communications investor presentation · this presentation and oral statements accompanying...

Altigen Communications

Investor Presentation

September 2020

ATGN

Safe Harbor Statement

FORWARD LOOKING STATEMENT This presentation and oral statements accompanying this presentation contain forward-looking statements, and any statements other than statements of historical fact could be deemed to be forward-looking statements. These forward-looking statements include, among other things, statements regarding future events, such as expected recurring revenue in fiscal year 2021, including revenues from CoreInteract, FrontStage Contact Center and Omni-Channel Contact Center, anticipated adoption of Microsoft Teams and our ability to achieve increased market acceptance of our service offerings and penetrate new markets, and expectations regarding Altigen’s financial and operational results and ability to achieve its business plan in 2021 and beyond. These statements are based on management’s current expectations and actual results and future events may differ materially due to risks and uncertainties, including risks related to potential delays or failures in development, risks related to business and/or competitive factors, including rapidly changing customer preferences and trends. There can be no assurances that the Company will achieve expected results. 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. 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.

NON-GAAP FINANCIAL INFORMATIONThis presentation and oral statements accompanying this presentation contain both GAAP and non-GAAP financial information. Altigen considers non-GAAP financial information to be a helpful measure to assess its operational performance and for financial and operational decision-making.

Confidential - Not for Distribution

Altigen Communications Overview

Completing our Transition from an On-Premises Provider of Software-based Phone Systems to a

Cloud Provider of Unified Communications as a Service (UCaaS) Solutions based on the Microsoft Platform

G&A:6 Sales &

Marketing:12

Research & Development:

27

Operations & Support:

12

Employees by Category

• Headquartered in Silicon Valley, California

• In Business for 20+ Years

• More than 2,500 Current Customers

Monthly Recurring:64%

Services:6%

Annual Recurring:23%

Product:7%

FY20 % of Revenue by Category ATGN Stock Overview*

Current Stock Price $2.20

Shares Outstanding 22.9M

Stock Float 16.8M

Market Capitalization $50.6M

Earnings per Share $.07

Price / Earnings Ratio 31.4

Average Daily Volume 46.2K

*As of September 24, 2020


ATGN Summary Financials

Category FY17 FY18 FY19 FY20(9 Months)

Revenues $8,388 $10,002 $10,632 $8,795

Cost of Revenues $1,270 $1,645 $1,979 $2,024

Gross Margin 84.9% 83.6% 81.4% 76.9%

Operating Expenses $6,729 $7,208 $6,505 $5,354

EBITDA $555 $1,831 $2,421 $1,997

Net Income $379 $9,840(1) $1,917 $1,425

Net Cash $3,876 $3,080 $4,357 $6,106(2)

(1) One Time non-cash benefit due to assessed value of NOL’s(2) Includes $804K in PPP proceeds

Historical Perspective: Altigen’s Original Hardware-Centric Business Model

MaxCS Call Center User

MaxCS PhoneSystem User

AltigenIP Phone

Customer Facility

MaxCS Server

Hardware Business Model Overview

• Computer Hardware, Telephones & Software Soldand Installed at the Customer’s Facility

• All Revenue Recorded on a One-Time Basis

• Altigen One Time Revenue = $250 to $350 per User

• 90% Hardware, 10% Software, 0% Recurring Revenue


2012: Altigen Changes Business Model from Hardware to Software



AltigenIP Phone

Customer Premises

MaxCS Server


Software Business Model Overview

• Eliminated all Hardware Manufacturing

• Delivered an All Software Solution

• Introduced Software Assurance Program

• Added Recurring Revenue of ~ $2.50 per User per Year


2016: Altigen Evolves to a Hosted PBX Recurring Revenue Business Model

MaxCS Cloud Business Model Overview

• MaxCS All Software PBX Deployed in Altigen’s Cloud

• Bundled SIP Phone Service + MaxCS PBX Software

• Billed as Monthly Recurring Revenue

• Average Revenue Increased to ~ $20 per User per Month


SIP

Trunk Service



3rd PartyIP Phone


$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

2017 2018 2019 2020 Est.

MaxCS Cloud: 29% Annual Revenue Growth

MaxCSCloud PBX

The Next Chapter: Altigen Drives New Revenues with Microsoft Teams


Microsoft Teams Phone System

Teams is Microsoft’s Communications & Collaboration Platform

Teams is Included @ No Charge in Microsoft Office 365 Plans

Altigen adds Enhanced PBX & Contact Center Apps to Teams

Enables Company PBX to be Replaced with Teams Phone System

Microsoft Teams Adoption Creates Market Opportunity for Altigen

-

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

04/17 11/17 04/18 11/18 04/19 11/19 04/20 08/2020

CO

RP

OR

ATE

USE

RS

Microsoft Teams Adoption


500,000: Organizations Globally have Deployed Teams

80,000,000: Active Teams Corporate Users

150: Average Number of Users per Customer

Microsoft Teams: Inside the Numbers

Target: 300,000 Organizations in USA now using Teams

Phase 1: Deliver Altigen SIP Trunk Services for Teams

Phase 2: Introduce New Value Add Applications for Teams

The Business Opportunity for Altigen

2020: Altigen’s Teams Solutions Delivering Accelerated Revenue Growth

$0

$200,000

$400,000

$600,000

$800,000

2017 2018 2019 2020 Est.

Altigen Teams Solutions: 100% Annual Revenue Growth

SIP Direct

Routing Service MicrosoftTeams

Altigen’sTeams Apps

Teams Call Center User

Teams PhoneSystem User

TeamsIP Phone


Teams Solutions Business Model Overview

• Altigen’s Teams Apps Deployed in Azure

• Bundled SIP Phone Service + Teams Phone System

• Altigen Apps Priced on a per User basis

• Total Solution Billed as Monthly Recurring Revenue



Key Metric: Altigen Core Cloud Revenue Growing at 33% AnnuallyMaxCS Cloud PBX + Altigen’s Teams Solutions

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

$8,000,000

FY17 FY18 FY19 FY20 (E)

MaxCS PBX Teams Solutions

Altigen Business Growth AcceleratorsNew Solutions Planned for Fiscal 2021 – Will Generate New Revenue Streams


SIP Trunk Caller Verification Service

• Fraud Detection / Spoofing – Verifies Caller ID

Altigen SIP Trunk Voice Biometrics Service

• Fraud Detection – Validates Caller Voice Print

FrontStage Contact Center for MaxCS / Fiserv and Microsoft Teams

• Complete Omni-Channel (Voice + Digital Media) Contact Center

CoreInteract* Enterprise Digital Customer Engagement for Microsoft Teams

• Enterprise Routing, Queuing and Analytics for Inbound Calls, SMS, Chat and Email

CoreInteract* Compliance Call Recording for Microsoft Teams

• Enterprise-wide Call Recording of Microsoft Teams Calls and Meetings

*Acquired September 2020

Why Altigen?


• Successful Conversion from One Time Product Sales to Cloud Recurring Revenue Business Model

• 87% Recurring Revenue; 63% Cloud Revenue

• Cloud Revenue Growth Averages 33% Annually

• Consistent Profitability

• Approximately $48M in Federal NOLs; $22M in State NOLs

• Strong Balance Sheet - $6.1M in Cash; Zero Debt

• Low Valuation Relative to Industry Peers

• High Growth Opportunities Based on Microsoft Teams + New Altigen Solutions

Contact UsUnited States

670 N McCarthy BlvdMilpitas, CA 95035

+1 408.597.9000

United Kingdom

11-21 Paul StreetLondon, EC24 4JU

+44 (0) 1582 287613

www.altigen.com

[email protected]

Thank You!

http://www.altigen.com/

mailto:[email protected]

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