www.zoomtel.com

Q3 2019 Earnings Presentation – November 2019

OTC: ZMTP

2

This presentation contains forward-looking information relating to Zoom’s plans, expectations, and intentions. Actual results may bematerially different from expectations as a result of known and unknown risks, including: the increase in tariffs on the Company'simports from China; potential changes in NAFTA; the potential need for additional funding which Zoom may be unable to obtain;declining demand for certain of Zoom’s products; delays, unanticipated costs, interruptions or other uncertainties associated withZoom’s production and shipping; Zoom’s reliance on several key outsourcing partners; uncertainty of key customers’ plans and orders;risks relating to product certifications; Zoom’s dependence on key employees; uncertainty of new product development, includingcertification and overall project delays, budget overruns, and the risk that newly introduced products may contain undetected errors ordefects or otherwise not perform as anticipated; costs and senior management distractions due to patent-related matters; and otherrisks set forth in Zoom’s filings with the Securities and Exchange Commission. Zoom cautions readers not to place undue reliance uponany such forward-looking statements, which speak only as of the date made. Zoom expressly disclaims any obligation or undertaking torelease publicly any updates or revisions to any such statements to reflect any change in Zoom’s expectations or any change in events,conditions or circumstance on which any such statement is based.

2

Forward Looking Statements

3

3

About Zoom Telephonics

Zoom Telephonics, Inc. designs, produces,markets, and supports Motorola brand cablemodems, routers, and other Internet and WiFiproducts under an exclusive worldwide licensefrom Motorola. Zoom also sells industrial USBcell modems and other communicationproducts under its Zoom brand.

Ticker: ZMTPHeadquarters: 225 Franklin Street, Boston, MA 02110Employees: 37Shares Outstanding: 20.9 Million*

Website: www.zoom.net

* As of October 25, 2019

4

$10.8

$17.8

$29.4

$32.3

$0

$5

$10

$15

$20

$25

$30

$35

$40

Quarterly Revenue ($ in millions)

Annual Revenue ($ in millions)

$3.1$2.6

$3.4

$1.8

$2.7

$4.0

$6.0

$5.2$5.2

$6.8

$8.6$8.9

$8.3

$7.5

$9.0

$7.5

$8.0$8.2

$10.9

$0

$2

$4

$6

$8

$10

$12

Q1 Q2 Q3 Q415 16 17 18 19

Revenue by Year and Quarter

2016 20172015 2018

+ 9.9%

15 16 17 18 19 15 16 17 18 19 15 16 17 18

5

SALES

2019 Third Quarter Financial Highlights

Q3 2019 REVENUES

+20.8% to $10.9M

Top Line Growth Was Driven By Etail And Best Buy.Gross profit was reduced by $1.03 million in tariff expense.

MARGINS

Q3 2019 GROSS MARGIN

38.2% before tariffs; 28.8% after

tariffs

PROFITABILITY

Q3 2019NET LOSS $0.2M;

PROFIT $0.8M if no tariffs

6

Market Share of Amazon’s Cable Modem Sales

53.0%

29.0%

8.0%10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Arris Netgear Zoom(Motorola

Brand)

All others

October 2016

29.1%

41.2%

27.7%

2.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Arris Netgear Zoom(Motorola

Brand)

All others

Week Ending 10/26/2019

7

Strong Relationships with Top Retailers & Distributors

8

$ in Millions

Quarterly Gross Profit / Margin

$0.8

$1.2

$1.9

$1.4

$1.7

$2.2

$3.1 $3.2 $3.3

$2.7

$3.3

$2.4 $2.4

$2.8

$3.1

30.7% 30.2%32.1%

27.3%

33.7%32.1%

35.7%36.6%

39.4%

36.3% 36.4%

31.6%30.2%

33.9%

28.8%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019

Gross Profit Gross Margin

9

17

Tariff Impact Update

Total Income reduction due to Tariffs September 2018 through September 2019: $2.12 million

• Steps We Have Taken In Response:• Submitted a “Made in Mexico” proposal which was denied• Submitted “Economic Harm” filings for a number of products which were denied • Re-submitted other, improved “Economic Harm” filings with which included more support

letters and calls. Those are still pending, and we anticipate a USTR decision by mid-December.

• If one cable modem is approved for Economic Harm status, all our cable modem filings will likely be approved, enabling Zoom to recoup the total tariff paid for the approved category. However, we don’t know yet whether any of our cable modems will be approved for Economic Harm status.

• We are planning to move the vast majority of our products to Vietnam in early 2020. Our cable modem supplier’s Vietnam factory is newly built and operational, and a second supplier already has a successful factory in Vietnam.

10

17

Major Components Of $0.5 Million Operating Expense Increase Over Q3 2018

• General and Administrative Expense: Up $295K, with $215K of the increase due to compensation & recruiting increases

• Research and Development Expense: Up $143K, with $120K of the increase due to compensation & recruiting increases

• Sales and Marketing Expense: Up $35K. $250K Motorola royalty increase and $130K retailer program increase offset by $330K advertising decrease.

11

9/30/2019 6/30/2019 12/31/2018 9-Month Change

Total Cash $2,280 $1,791 $126 +1,709.5%

Total Current Assets $13,754 $13,727 $11,733 +17.2%

Total Assets $14,368 $14,402 $12,216 +17.6%

Bank Debt $0 $0 $1,741 --

Total Current Liabilities $7,169 $7,130 $8,340 +14.0%

Total Liabilities $7,195 $7,182 $8,340 +13.7%

Current ratio 1.92 1.93 1.41 +37.6%

Working Capital $6,585 $6,598 $3,393 +94.1%

Stockholders’ Equity $7,173 $7,220 $3,876 +85.1%

Balance Sheet Bolstered by $5M May 2019 Financing(in thousands except percentages)

12

Motorola Exclusive Licensing Agreement

January 2016 September 2017August 2016

North America Only Entire World Entire World

Products: Products: Products:

• Cable modems/routers• Cable modem bridges• Cable set-top boxes

containing modems

• Cable modems/routers• Cable modem bridges• Cable set-top boxes

containing modems• Routers including WiFI,

cellular, wired, and routers with built-in modems

• WiFi range extenders• Powerline Network

Adapters• Wireless Access Points

• Cable modems/routers• Cable modem bridges• Cable set-top boxes

containing modems• Routers including WiFI,

cellular, wired, and routers with built-in modems

• WiFi range extenders• Powerline Network

Adapters• Wireless Access Points• Cellular sensors (non

exclusive)• Cellular modems• DSL modems/routers• MoCA adapters

13

13

What We Expect in 2020 (compared with 2019) 2019 2020

Tariffs expensive and distracting Dramatically better control of tariff situation

Few new product introductions Many new, exciting products

Only 1 DOCSIS 3.1 product Many DOCSIS 3.1 products

No Minim contribution Expect significant Minim contribution

No mesh products Several mesh products, 2 early in 2020

Low cell product revenue Expect significant cell product revenue

Start year with retail shelf metric of 5250 Start year with retailer shelf metric of 9055

No significant MSO sales Significant MSO sales likely in 2H2020

Many Amazon seller issues Improved team now solves issues faster

1 big supplier, 1 small one 2 big suppliers, 2 medium, 1 small

Low shareholder outreach Significant shareholder outreach

No www.zoom.net Check out www.zoom.net

14

14

Sales Channel Goals – Progress UpdateGoal Progress

Increased retail store shelf spaceSignificant increase in Best Buy shelf space, shelf position, and store displays. Increase in Target is happening now.

Service provider salesWe recently hired a VP of Sales with proven service provider success. Significant focus being applied to growing this channel.

Incorporate Minim technologyIncluded with a new cable gateway product that ships soon. We are extending this work to other cable gateway and router products.

Expand recurring revenuesIn Q2 2019 the MultiSensor provided Zoom’s first recurring revenues. Motorola branded cloud/applications services and IoT products are expected to dramatically expand recurring revenues over time.

Expand international salesWorking with Reseller Partners to expand into Canadian and Latin American markets.

Meaningful Cell Modem Revenues & Profits Should begin Q1 2020 as new products are launched.

15

15

• Achieved lower product costs to be price competitive

• Expanding product portfolio with products that service providers value

• Products have best-in-class performance

• Meetings with MSO’s taking place now

• Ability to help MSO’s increase ARPU while lowering capital and operating costs

through our Motorola Network Management Cloud and Application solution

• Technical support can view customer’s network and check for problems

• Reduce or eliminate service operator truck rolls; enable more end-customer

self-installs

• Potential revenue-add services for MSOs

• Hiring people with proven success selling to MSOs

Q1:2020 to begin sampling first designed-for-MSO samples

Selling to Cable Service Providers (MSOs)

We Accomplished This To-Do List

16

16

Technology Trends Help Drive Sales Growth

Subscription & Cloud-based

OfferingsWiFi ax Transfer Speed

= 1,320Mbps

DOCSIS 3.1 for higher cable modem speed Home WiFi Mesh Networking

Advanced Cellular Technology and 5G Future Speed = 10Gbps

Network Management &IoT Security

17

Bridge Modems (Data Only)

New products -incorporating

DOCSIS 3.1 Technology

Wireless Gateways

New products -incorporating

DOCSIS 3.1 and including WiFi 6

technology

Wireless Voice Gateways and

EMTA’s

New products -including

DOCSIS 3.1, 3.0, WiFi 6, Voice,

and other exciting

technology

New Products….Better than ever!

WiFi Routers

New products –incorporating WiFi 5/6 and

Mesh technology

WiFi Extenders, Cell Modems,

and Cell Routers

New products –incorporating WiFi 6, Mesh, Cellular, and Battery Back

Up technology

MoCA Adapter

New product incorporating

MoCatechnology

DOCSIS Product Solutions Home Networking Product Solutions

New

Design!

18

Wireless Solutions…Better than ever!

Best-in-Class WiFi Product

And Service Offering

Mesh Extender

(with Motorola Agent)

Gateway with Mesh Capability

(with Motorola Agent

& PowerBoost™)

Motorola Home Network

Management Application

Motorola Technical

Support using

Our Home Network

Management

Cloud

Mesh Extender

(with Motorola Agent)

Motorola Whole Home WiFi Coverage

Motorola Home Network Management Cloud

Mesh Controller

(with Motorola Agent)

OR

Home Owner

19

17

Steps to Increasing Shareholder Value

• Improve product margins by reducing/eliminating impact of tariffs, achieving lower supplier

component costs, and bringing on new supplier with better economies-of-scale cost structure

o Significant changes beginning early next year

• Continue growing high-margin revenues

• Introduce new high-volume products – DOCSIS 3.1, Mesh Routers & Extenders, Cell Products

o Significant introductions starting Q1 2020

• Downstream revenues via Motorola Home Network Management powered by Minim

• Continue excellent sales, marketing, support

202020

Investor RelationsZoom Telephonics, Inc.225 Franklin StreetBoston, MA 02110Telephone: (617) 753-0897Email: investor@zoom.net

Contact Us