feb 18-2015 vasco investor presentation
TRANSCRIPT
© 2014 - VASCO Data Security
`We authenticate the world
Investor presentation T. Kendall HuntChairman & CEO
February 17, 2015
© 2014 - VASCO Data Security CONFIDENTIAL
Forward Looking Statements
Statements made in this presentation that relate to future plans, events or performances are forward-looking statements within the meaning of Section 21e of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933. These forward-looking statements (1) are identified by use of terms and phrases such as “expect”, “believe”, “will”, “anticipate”, “emerging”, “intend”, “plan”, “could”, “may”, “estimate”, “should”, “objective”, “goal”, “possible”, “potential”, “project” and similar words and expressions, but such words and phrases are not the exclusive means of identifying them, and (2) are subject to risks and uncertainties and represent our present expectations or beliefs concerning future events. VASCO cautions that the forward-looking statements are qualified by important factors that could cause actual results to differ materially from those in the forward-looking statements. These risks, uncertainties and other factors that have been described in our Annual Report on Form 10-K for the year ended December 31, 2013 and include, but are not limited to, (a) risks of general market conditions, including currency fluctuations and the uncertainties resulting from turmoil in world economic and financial markets, (b) risks inherent to the computer and network security industry, including rapidly changing technology, evolving industry standards, increasingly sophisticated hacking attempts, increasing numbers of patent infringement claims, changes in customer requirements, price competitive bidding, and changing government regulations, and (c) risks specific to VASCO, including, demand for our products and services, competition from more established firms and others, pressures on price levels and our historical dependence on relatively few products, certain suppliers and certain key customers. Thus, the results that we actually achieve may differ materially from any anticipated results included in, or implied by these statements. Except for our ongoing obligations to disclose material information as required by the U.S. federal securities laws, we do not have any obligations or intention to release publicly any revisions to any forward-looking statements to reflect events or circumstances in the future or to reflect the occurrence of unanticipated events.
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© 2014 - VASCO Data Security CONFIDENTIAL
Company Overview
VASCO is a global leader in strong authentication, digital signatures,
and identity management solutions specializing in securing financial
transactions and protecting access to data and applications.3
© 2014 - VASCO Data Security CONFIDENTIAL
Listed on NASDAQ in 1997
21% Compound Annual Growth Rate in
Revenues from 2004-2014
48 Consecutive Quarters of Profitability
Visionary in Gartner Magic Quadrant
for User Authentication
Company Overview
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© 2014 - VASCO Data Security CONFIDENTIAL
10,000+ Customers in more than 100 Countries,
More than half of the Top 100 Global Banks
and 1,700+ Financial Institutions rely on VASCO
More than 200 Million Authenticators Sold
On-Premise, Mobile, and Cloud Solutions
Company Overview
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© 2014 - VASCO Data Security CONFIDENTIAL
Global Company
VASCO HQ
VASCO Offices
VASCO Sales Presence
Local people/markets
Local expertise and know-how
371 employees
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© 2014 - VASCO Data Security CONFIDENTIAL
Financial Institution Customers
1,700+
VASCO is the world leader in providing two-factor authentication and digital signature solutions to
financial institutions. More than half of the Top 100 Global Banks rely on VASCO solutions.
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© 2014 - VASCO Data Security CONFIDENTIAL
Frequency and sophistication of attacks has increased
High-profile breaches have brought security
to the C-level and Board of Directors
New regulations are being enacted globally to protect
consumer transactions and personal privacy
Mobile is becoming the device of choice
There is a greater need to enhance security
while improving convenience for users
Key Growth Drivers
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© 2014 - VASCO Data Security CONFIDENTIAL
"Two out of three attacks focus on [login] credentials at some
point in the attack. Trying to get valid credentials is part of many
styles of attacks and patterns"
- Jay Jacobs, senior analyst with Verizon
Authentication & Digital Signature Platform
Why Authentication
• Data breaches are up 49%(1)
• Protects against the newest attacks
• Easy to implement and use
(1) The Breach Level Index, released February, 2015.
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© 2014 - VASCO Data Security CONFIDENTIAL
Technology and Products
19881st DIGIPASS“Access Key”
19891st DIGIPASSwith Keypad
2002VACMANController
2004DIGIPASS GO 31st 1-button token
2005IDENTIKEY
SERVER
2005DIGIPASS 810
EMV card reader
2006DIGIPASS 9051st connectedCard reader
2007DIGIPASS 270
1st thin formToken w/keypad
2008DP for Mobile
Soft tokenfor phones
VASCO Solution Timeline
1991DIGIPASS 550
with e-Signature
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© 2014 - VASCO Data Security CONFIDENTIAL
2014Rabo Scanner
Card reader withCrontoSIgn technology
2014DIGIPASS for Apps
with CrontoSIgn technology
Technology and Products
2013DIGIPASS for AppsSDK for integration
into applications
VASCO Solution Timeline
2011DIGIPASS 920
Connected readerfor e-Government
2013DIGIPASS 8701st dual modee-Gov’t reader
2015Risk IDS
1st RBA withIntelligent engine
2013DIGIPASS 7601st token with
Cronto technology
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2014DIGIPASS Bluetooth
Smart-enabledAuthenticators
© 2014 - VASCO Data Security CONFIDENTIAL
Host System
• VACMAN Controller: Combines all VASCO authentication technologies into a unified backend platform.
• IDENTIKEY Authentication & Federation Servers: Off-the-shelf centralized servers that with complete functionality.
• Cloud Services: Authentication and digital signature services for web and mobile application developers run on VASCO’s servers.
Client Authenticators
• DIGIPASS: Industry-leading number of hardware and software authentication and signature (electronic and digital) solutions available to customers.
• Embedded & OEM Solutions: DIGIPASS integrated into client devices such as Intel’s Identity Protection Technology.
VASCO’s Product Offerings
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© 2014 - VASCO Data Security CONFIDENTIAL
On-Premise Business Model
Banking:
• Corporate Accounts
• Consumer Accounts
• Internet and Mobile Applications
Enterprise Security:
• Remote access
• Application Security for B-to-B and B-to-C
• Employee network access
BankingEnterprise & application
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© 2014 - VASCO Data Security CONFIDENTIAL
Cloud-Based Business Model
Services
A cloud-based expansion of VASCO’s traditional on-premise solution.
“By 2017, more than 50% of enterprises will choose cloud-based services as the
delivery option for new or refreshed user authentication implementations,
up from less than 10% today.” - Gartner
Cloud advantages:• Easy to implement• Unlimited scalability• Low implementation cost• Operating vs. Capital expense• Rapid deployment
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© 2014 - VASCO Data Security CONFIDENTIAL
• Strong Authentication in the cloud
• Allows customers to reduce implementation time and cost
• Provides strong authentication protection without
requiring a high level of expertise on staff
• Host system software maintained on VASCO servers:
• Business-to-Business (B2B)
• Business-to-Employee (B2E)
• Business-to-Consumer (B2C)
• Recurring revenue paid by the customer
DIGIPASS as a Service
DIGIPASS as a Service
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© 2014 - VASCO Data Security CONFIDENTIAL
Key Product Initiatives
DIGIPASS 760
New Attack Methods Require Innovative Solutions
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DIGIPASS for Apps
DIGIPASS Bluetooth
Risk-BasedAuthentication
© 2014 - VASCO Data Security CONFIDENTIAL
• Developed by Cambridge University PhD’s
• Acquired by VASCO in May 2013
• Next generation HD Color QR Code with greatly expanded data capacity
• Combines strong authentication and signature capabilities with a high level of user convenience
• Defeats Man-in-the-Middle attacks
• Fully supported by VACMAN and IDENTIKEY
• Works from a mobile device or DIGIPASS 760
Cronto Visual Image Authentication
DIGIPASS 760
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© 2014 - VASCO Data Security CONFIDENTIAL
Cronto Visual Image Authentication
How it Works – Scan to Sign
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© 2014 - VASCO Data Security CONFIDENTIAL
• Incorporates security directly into the application
DIGIPASS for APPS
DIGIPASS for APPS
• Native integration
of two-factor
authentication
• Developers focus
on their application
and outsource the
security to VASCO
Source: Gartner
Global App Downloads Passed 100 Billion Last YearEstimated mobile app downloads worldwide (in billions)
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© 2014 - VASCO Data Security CONFIDENTIAL
DIGIPASS for APPS
A Library of Advanced Security Applications
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All of the necessary building blocks to secure applications at every level, from provisioning to
the human interface.
© 2014 - VASCO Data Security CONFIDENTIAL 21
Geolocation
OS Version
JailBreak & Rootkit
Malware
PIN Activated
Behavior Analysis
Biometric
Clie
nt S
core
Pol
icy
Sco
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P I
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Clie
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ide
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olic
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Action 1
Action 2
Action 3
Action 4
Action 5
Action 6
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3 4
Action 1
Action 2
Action 3
Action 4
Action 5
Action 6
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Con
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Pla
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mU
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DIGIPASS for APPS
Intelligent Risk Scoring for Mobile Devices
© 2014 - VASCO Data Security CONFIDENTIAL
• Eliminates the biggest hurdles to cloud adoption
• Boosts customer trust
• Security as a competitive differentiator
• Ease of implementation
• Provides a pay-as-you-grow approach
• Next step in DIGIPASS as a Service
Cloud-based Security for Application Developers
DIGIPASS for APPS
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© 2014 - VASCO Data Security CONFIDENTIAL
Bluetooth Smart-enabled
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Bluetooth Smart Enables Authentication with almost any User Device
• Solves the problem of mobile devices with no USB port
• More convenient with no cables to connect
• Secure Bluetooth Smart-enabled connection
• Works in connected and unconnected mode
© 2014 - VASCO Data Security CONFIDENTIAL
Risk-Based Authentication
How it works:
Risk IDS
Source: Gartner
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© 2014 - VASCO Data Security CONFIDENTIAL
• Contextual analysis to apply the appropriate level of security
• Real-time analysis and intelligent decision engine focusing on:
• Web and mobile application login
• Financial transactions via online and mobile channels
• Monitoring non-monetary events such as change of address
• Identification of accounts that demonstrate abnormal characteristics
for the prevention of money laundering.
Risk IDS
Risk-Based Authentication
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© 2014 - VASCO Data Security CONFIDENTIAL
Revenue and Operating Income
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
22.929.9
54.6
76.1
120.0133.0
101.7 108.0
168.1
154.0 155.0
201.5
1.1 5.6 11.018.9
30.1 28.1
12.6 12.424.8 21.0
13.7
38.1
Revenue Operating Incomein millions USD in millions USD
CAGR(revenue)
2004-2014
21%
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© 2014 - VASCO Data Security CONFIDENTIAL
Cash Balance and Net Working Capital
2006 2007 2008 2009 2010 2011 2012 2013 2014
12.6
38.8
57.7
67.6
85.5 84.5
106.5
98.6
137.4
22.1
52.4
75.9
87.6
96.9
108.6
129.5124.5
161.0
Net Cash Balance Net working capitalin millions USDin millions USD
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© 2014 - VASCO Data Security
Copyright 2014 VASCO Data Security. All rights reserved.No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of VASCO Data Security.
Trademarks VASCO®, VACMAN®, IDENTIKEY®, aXsGUARD®, DIGIPASS® Cronto®
MYDIGIPASS.COM® and the ® logo are registered or unregistered trademarks of VASCO Data Security, Inc. and/or VASCO Data Security International GmbH in the U.S. and other countries
Copyright & Trademarks
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