pareteum corporation company overview · 2019-05-23 · company overview •september 17 ......

Pareteum CorporationCompany Overview• September 17, 2018

Global Software Defined Cloud

Cloud Connectivity Content

2© Pareteum 2018 (NYSE American : TEUM) Complete with accompanying oral presentation

Certain statements contained herein constitute "forward-looking statements" within the meaning of the Private SecuritiesLitigation Reform Act of 1995. Such statements may include, without limitation, statements with respect to Pareteum’s plansand objectives, projections, expectations and intentions. These forward-looking statements are based on currentexpectations, estimates and projections about Pareteum’s industry, management's beliefs and certain assumptions made bymanagement. Readers are cautioned that any such forward-looking statements are not guarantees of future performanceand are subject to certain risks, uncertainties and assumptions that are difficult to predict. Because such statements involverisks and uncertainties, the actual results and performance of Pareteum may differ materially from the results expressed orimplied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance onsuch forward-looking statements.

Unless otherwise required by law, Pareteum also disclaims any obligation to update its view of any such risks or uncertaintiesor to announce publicly the result of any revisions to the forward-looking statements made here. Additional informationconcerning certain risks and uncertainties that could cause actual results to differ materially from those projected orsuggested in Pareteum’s filings with the Securities and Exchange Commission, copies of which are available from the SEC ormay be obtained upon request from Pareteum.

Forward Looking Statements


• Disruptive business model: rapidly growing global cloud enablement software company delivering award winning mobile enablement and IoT services companies, without telco infrastructure investing

• Growth driven by new way to deliver services that slashes costs and increases revenue generation for customers

• 70% + gross margins in existing large and growing multi-Billion dollar market

• $375 M contractual revenue backlog (as of July 31, 2018)

• Led by successful entrepreneurs, completed successful turnaround and have track record managing rapid growth in software and communications industries

• Patented software is not easily replicated, creating a financial, time based, competitive barrier to entry

• Path to profitability is accelerated via high margins on subscribers/connections and the magic of monthly recurring revenue will drive sustainable returns

• Attractive enterprise valuation based upon our current PPS, facilitating excellent risk adjusted returns

Investment Highlights


Ticker: TEUM Exchange: NYSE American

Stock Price (9/14/18): $2.81

Analysts Price Targets: $3.10 - $4.50*

Avg. Daily Trading Volume for 3 Months (ending 9/14/18): 1.3 M

Shares Outstanding (7/31/2018): 59 M

Market Cap (9/14/18): $169 M

Revenues (ttm) (12/31/17): ~ $13.5 M

36 Month Contractual Revenue Backlog (8/31/18): $375 M

*12-month price targets: Ascendiant Capital $4.50 as of 05/09/2018; Taglich Brothers $4.00 as of 08/24/2018; Joseph Gunnar$3.50 as of 04/05/2018; Dawson James $3.10 as of 05/16/2018.

Equity Snapshot


Leading global software defined cloud company

delivering award winning mobile enablement, without heavy

capex investment in proprietary technology or infrastructure

The world’s largest taxi company, owns no vehicles

The world’s most popular media owner creates no content

The most valuable retailer, has no inventory

The world’s largest accommodation provider, owns no real estate

The world’s largest network of gourmet coffee retailers own no stores or outlets

The world’s largest movie house owns no cinemas

The world’s fastest growing bank has no actual money

The world’s largest software vendors don’t write their apps.

Digital Economy: Monetization to the Cloud


Class 5:local central office

Local Loops

Tandem office

Products1970s

Product + Services1990s

Customer Centric2000s

Relationship CentricToday

Network Evolution

Product and Services Evolution

Global Cloud TEAX

Pareteum

MSPMVNE/MVNO

53 MNOs in 76 countriesCLEC

VoIP Providers

Traditional Retail Phone

Providers

Broadband

Hosted PBX / IP PBX

Local Loops

PSTN Internet

Virtual Hosted PBX

Virtual Call Centers

Broadband

MNO

IP Nets Internet RAN

Virtual Telco Apps

Broadband

Class 1:regional centers

Class 2:sectional centers

Class 3:primary centers

Class 4:toll centers

Digital Economy Evolution


Managed Services CloudSuperAPI Customer Use Case Enablement:• Global Mobile Network Operators• Communication Service Providers• Enterprises & Businesses

Pareteum Strategies: Open Mobility & Applications Software (APIs)

Any Device, Anywhere

Software defined platform enabling real-time:-Connectivity/access/SMS/Mobile airtime/Streaming media-Identity Management and Security, Blockchain, Mobile payments, cryptocurrencies-Predictive analytics “insights”, Reporting, Artificial Intelligence, Machine Learning-Market and product management (rapid entry and innovation)-Unified Account management (multi channel/platform access and control)-Policy management (Control and present new service offers)-Online real-time charging (Control, unbundle and rate to retain and drive ARPU)

Application Developer’s SDKSuperAPI Customer Use Case Enablement:• IoT• Smart Cities• Customer Vertical Markets

Global Software Defined Cloud• SuperAPI Customer Use Case Enablement:

• Communication Services Providers• Enterprises, Campuses,

Governments


As Connected “Things” (Cars, Goods, People, etc.) move among networks (4G, Wi-Fi, Narrow-Band IoT), needed are:• Seamless & Ubiquitous Access• Payments Systems

• Cryptocurrencies & Blockchain• Security & Identification Services• City & Citizen Services

• Purchasing/payments/settlements/ commerce

• Scalable Platform Services• Artificial Intelligence• Machine Learning• Predictive analytics “insights”• Cloud Connectivity• Monetized Transaction Exchange

Pareteum’s Software Platform: makes all of this possible … this is the Internet of Things

Smart Cities: An Eastern European IoT Case Study

Citizens can make payments, report incidents, send photo and localization information, check the status of the incident


Customer Success Platform: A Global Mobile Network Operator MVNE Case StudyAny device … anywhere … anytime … pay as you go @ The Speed of Need

PROBLEMS

Legacy upgrades are costly

Integration of new solutions

New competitors (OTT)

Information siloes

Cost and complex operations

LEGACY SYSTEMSRadio

Networks

2G 3G 4G

Future 5G

SupportSoftware

B/OSS*

ERP/APPS**

APIS

Internet of Things Enabler:API Development Platform &

Developer's Toolkit

Connectivity Enabled App Exchange

APIS

One Integrated Software Apps View

Sales, Marketing, Customer Service, Subscribers,Dealers, Employees

* Business & Operations Support System (B/OSS)** Enterprise Resource Planning / Applications (ERP/APPs)

Cloud Connectivity Content

Complete software platform enabling real-time:• Market and product management (rapid entry and innovation)• Unified Account management (multi channel access and control)• Policy management (Control and present new service offers)• Online real-time charging (Unbundle retain and drive ARPU)

• Predictive analytics “insights”, Reporting, Artificial Intelligence, Machine Learning,…

• Identity Management and Security, Blockchain, Mobile payments, cryptocurrencies,…• Connectivity/access


64M+ Wi-Fi Hot Spots in 180+ Countries

1,000+ GSM and 200 CDMA SMS Global

Agreements

53 MNO Global Agreements in 76

Countries

Strategic Alliances For Global Success

41,002Employees

$ 18 BRevenue

50.8 M Homes Passed

24.7 MFixed-line

Subs.10.1 MMobile Subs.

59.6 MVideo, Internet, and Fixed-line

Telephony Subs

10.1 MWIFI

Access Points

LIBERTY GLOBAL

1,000+ GSM and 200 CDMA SMS Global Agreements

28.5 M46 K

2.2 M

1.8 M31 M

64M+ Wi-Fi Hot Spots in 180+ Countries


36M-CRB 2018 YTD: financial results follow

1413

8 8

43

$54 $55

$30 $29

$167

0

20

40

60

80

100

120

140

160

Total 18Q1 Total 18Q2 Total July-18 Total August-18 2018 YTD

In M

illio

n

113% increase as of

December 31st 2017

QoQ Av. 36M-CRB per deal

increased 10%• Torrid sales pace:

• 43 new contracts in 35 weeks for YTD 2018

• Revenue Outlook RAISED to > 80% YoY

• Affirmed full year positive:• cash generated from

operations• EBITDA


121% 121% 127% 103%106%

106% 106% 118%170% 203%

0

2,000

4,000

6,000

8,000

Q2 Q3 Q4 Q1 Q2

36-month Contractual Revenue Backlog Conversion

Planned $ Conversion

Total $ Conversion

Planned # Connections

Total # Connections

SuperAPI

GSDC

MSP 90 days

30 days

30 days

120 days

30 days

30 days

Prospect to

Contract

Contract to Cash

x 1,000

December 31, 2017 2018 2019 2020 Total

EMBEDDED BASE CUSTOMERS

36 Month Contracted Revenue Backlog (CRB) Live and in Service 11,057 11,778 20,962 43,797

36 Month CRB: In Deployment and Service Establishment 14,955 30,702 58,333 103,991

TOTAL REVENEUE BACKLOG 26,012 42,480 79,294 147,787

36-month

BUSINESS MODEL: CLOUD DELIVERED SERVICES & MRR

x 1,000

Total

Q1 2018

Actuals

Q2 2018

Actuals

(Q3-Q4)

2018 36M-

CRB

Total 2019 2020

EMBEDDED BASE CUSTOMER

36 Month Contracted Revenue Backlog (CRB) Live and in Service 4,113$ 6,003$ 12,935$ 23,051$ 31,093$ 47,520$ 25,567$ 117,116$

36 Month CRB: In Deployment and Service Establishment -$ -$ 4,748$ 4,748$ 53,039$ 110,104$ 90,007$ 257,899$

TOTAL REVENUE BACKLOG 4,113$ 6,003$ 17,683$ 27,799$ 84,132$ 157,624$ 115,574$ 375,015$

August 31, 2018

(Q1 + Q2)

20212018

36-month


• Pareteum Announces Record Second Quarter 2018 Results• Revenues of $6 million, up 85% Year-Over-Year

• Net Income of $1,656,338 or EPS of $0.03 per Share (versus net loss of ($1.3 million) in the second quarter of 2017)

• Adjusted EBITDA improved by over $834K, or 180%, to $1.3 million

• EBITDA of $597,263 (improved by over $898K, or 298%, to $597,263)

• Connections, a Lead Indicator of Revenue, Increased 225% over the Second Quarter of 2017 and 23% Increase Over the First Quarter of 2018

• Raised 2018 Outlook to > 80% Revenue Growth

• Operating Cash Flow Net of Restructuring and Acquisition Related Expenditures of $565K for the six months ended June 30, 2018

• Dollar based net expansion rate of 161% for contracts added since 2017

Company Update: Second Quarter 2018 Results


Valuation Analysis: Revenue Multiple and 36-Month Contractual Revenue Backlog

• Current Market Cap: $169 M• Revenue Multiple of current revenues:

•Q1-18 Exit Run Rate at $24 M: • Rev. Multiple = 7x

•SaaS Industry Range of 10-13x• 36Mth Contractual Revenue Backlog (36MCRB)

• 36MCRB $375 M as of 8/31/18•36MCRB multiple only 0.45x

•SaaS Industry Range of 4-6x

•Rule of 40: Revenue and Profit growth @ 40% or above

•Combined Rule of 40% is expected to yield industry revenue multiples

•Revenue SaaS Industry Range of 10-13x•36MCRB SaaS Industry Range of 4-6x

$169 $216 $240 $264 $288 $312

$-

$100

$200

$300

$400

7 9 10 11 12 13

Revenue Multiple ($24 M)$ Millions

$169 $375$750

$1,125

$0

$500

$1,000

$1,500

0.45 1 2 3

Backlog Multiple (Currently $375 M)$ Millions

Rule of 40%x1,000 Rule of 40% Q2 2018 YoY %

Revenue Value for Revenue is 0%-40% $ 6,003 85%

Adj. EBITDA (Profit) Value for Adj. EBITDA are 40%-0% $ 1,441 24%

TEUM Rule of 40% 109%

Rev Test: >/= 40% … TEUM = 85% yields high end SaaS X = 13X = $312 Million

Backlog Test: >/= 0% (since rev growth is > 40%) … TEUM = 24% yields high end SaaS X = 6X = $1.872 Billion


• Robert H. (Hal) Turner: Founder, Executive Chairman, Principal Executive Officer: chartered the successful course of numerous international and U.S. domestic communication, software, and technology startup, growth, and Fortune 500 companies (all sizes … all stages); selected engagements:

• Vic Bozzo, Co-Founder, Chief Executive Officer: extensive sales and marketing leadership in the Telecom and Internet industry that has led to significant revenue and customer growth and investor returns

• Rob Mumby, Chief Revenue Officer: 20 years of communications industry experience building profitable businesses and leading new market entries for high-growth disruptors and Fortune 500’s

• Ali Davachi, Chief Operating Officer and Chief Technical Officer: 30 years experience: complex technology architecture & delivery: application, infrastructure virtualization, public/private cloud, network & application security, big data analytics, workflow orchestration, blockchain & large scale mobile applications for large global companies

• Edward (Ted) O’Donnell, Chief Financial Officer: 25 years experience: investment banking, private equity & venture capital, internet technology, Software as a Service (SaaS) and other new media businesses

• Denis McCarthy, Senior Vice President Corporate Development: 20 years experience: financial management and mergers and acquisitions as well as operational experience in network management, agile software development, engineering and customer service in telecom and software sectors

Carlyle Capital Group

Executive Team Highlights


Hal Turner: Founder, Executive Chairman &

Principal Executive Officer

Vic Bozzo: Co-Founder, Chief Executive Officer

Ted O’Donnell: Chief Financial Officer

Denis McCarthy: SVP Corporate Development

[email protected]

HQ: New York CityOffices: The Netherlands, Spain, Brazil, Bahrain

Contact Us

Investor Relations Contact

Investor Relations:

US +1 (646) 810-2182

[email protected]

Hayden IR (Stephen Hart)

US +1 (917) 658-7878

Rayleigh Capital IR (Carrie Howes)

UAE +971 (0) 55-997-0427

UK +44 (0) 870-490-5443

CAN +1 (416) 900-3634

mailto:[email protected]

mailto:[email protected]

Appendix


Pro Forma Combined Capitalization Table

Pareteum capitalization as at July 31, 2018Common

TEUM (000's) Share Fully

Equivalents Warrants Options Diluted

Issued & Outstanding 59,022 10,929 3,502 73,453

Convertible Debt 48 732 780

Total Equity 59,070 11,661 3,502 74,233

Transaction Adjustment

Consideration Shares 37,852 37,852

Cancellation of Pareteum

shares owned by Artilium (3,200) (3,200)

Pro forma Total Equity 93,722 11,661 3,502 108,885

% Parteum Stockholders 59.6% 65.2%

% Artilium Stockholders 40.4% 34.8%

100% 100%1) % share splits based on Pareteum capitalization as at 31 July 2018. Differences vs. transaction announcement of 7 June 2018 reflect changes to the Pareteumissued shares outstanding and fully diluted share capital since that date.

pareteum corporation company overview · 2019-05-23 · company overview •september 17 ......

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