nms communications corporation investor summary february 2008

NMS Communications CorporationInvestor Summary

February 2008

www.nmscommunications.com Slide 2

Safe Harbor Statement

This presentation may contain projections or other forward-looking statements regarding future events or the future financial performance of the company. While these statements represent management’s current judgment on the future direction of the business, actual results may differ materially from any future performance suggested in the company’s forward-looking statements. We refer you to the documents that the company files from time to time with the Securities and Exchange Commission. These documents contain and identify important factors that could cause the actual results to differ materially from those contained in our projections or forward-looking statements.

www.nmscommunications.com

NMS Communications Corporation at a Glance

Value Added Services Focus – Developers and Operators

Technologies, Platforms, Applications and Services Global presence with products deployed in 100+

countries 25 year history of successes and industry “firsts”

For Developers & Integrators

For Operators


Investment Summary

LiveWire Mobile Early stage…$13M business - TTM Revenue growing 40% - 50% Y-o-Y Beginning shift to managed services model

NMS Communications $70M business w/ gross margins > 65% & contribution margins > 20% Global customer base Technology leadership & VAS market growth drive demand

Corporate Total Strong balance sheet - $30M cash and marketable securities as of

December 31st, 2007 Improved financial performance

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Slide 5

A Singular Focus on Mobile Personalization Services

LiveWire Mobile makes creating a mobile identity and mobile experience simple for subscribers and lucrative for operators.

Slide 6

7

Market Opportunity: the Intersection of P2P Communications and Personalization

Drivers:

Personalization

Improved networks and handsets

Consumer brands

Advertising

Market Segment 2005 2010 Applications

Enhanced P2P

Communications

$9B $27B Push-to-talk,

voiceSMS,

mobile IM, MMS,

videoSMS,

video sharing

Personalization $15B $48B Skins, wallpapers,

ringtones, ringback

Source: Yankee Group

Slide 7

Ringback Actuals

* Through December 2007

01,000,0002,000,000

3,000,0004,000,0005,000,0006,000,000

7,000,0008,000,000

2004 2005 2006 2007

Active Ringback Subscribers(7.1M)*

0

50,000,000

100,000,000

150,000,000

200,000,000

2004 2005 2006 2007

Ringback Service Footprint(189M)*

Slide 8

Our Service Offerings TodayA Ringback for Every Subscriber in Your Network

Slide 9

Virgin Mobile USA Customer Snapshot

“We selected LiveWire Mobile because of their impressive track record with deploying and managing mobile personalization services like ringback. Their Infuse Personalization Platform and Achieve Marketing Program are well-aligned with our focus on providing personalization services for our customers.”

Dominick Tolli, vice president, mobile data services for Virgin Mobile USA

Slide 10

Service (2009)CapEx (2007)

Offering Software & Hardware Managed Service

Application Music Ringback Music Ringback++

3 Year Value Per Subscriber $N 3 – 6x$N

Shift To Managed Services

Business Driver Technology Service Success

Go-to-market Indirect Direct

Revenue One-Time/Less Predictable Repeatable/Predictable

Slide 12

CapEx vs. Managed Service example

$s M Cap ExManaged Service

Revenue 1.0$ 5.0$

Cost 0.5 1.5

Gross Profit 0.5$ 3.5$

Slide 13

Managed Services Target Business Model (2009)

• 10 mobile operators launched over 10 Qtrs

• Low double digit penetration of sub base

• Share of monthly subscription fees ~ $0.50

• Share of content fees

• Profitability early ‘09

• 40% - 50% Y-o-Y revenue growth rates for next 3 years

Slide 14

TargetModel

Revenues 100%

Costs 30%

Gross Margin 70%

OPEX 50%

Cont Margin 20%


NMS Communications

Slide 15


NMS Communications Market Focus

VAS - Enhanced Services/Applications Technology leader New application areas emerging

Mobile Highest growth area for VAS (>ARPU)

Video/Multi-media Central to next wave of applications +

investmentAsia – Global innovation leader Approach: Fast TTM w/New Apps “Applications Driven” offerings

Landline

WirelessTriple-play

Broadband

VoiceSMS

Mobile Video Services


Business Model

Application Components

Servers, App Platforms

Ser

vice

s

Core Technologies• Mobile Video technology• Media Processors: boards + HMP• Signaling, protocols, global approvals• ATCA MRFP platform

• VXML servers• Application-specific Gateway Server• Signaling Server

• MobileTV• VideoSMS• VideoPortal

SI’sNEPs

Service Providers / Enterprises

Enabling NEPS and systems integrators to deliver value added services quickly and efficiently –

3 ways to win emerging apps

Slide 17


Real-World Deployments:Mobile TV: Hong Kong CSL

Hong Kong CSL launch Mobile Video TV

Built on NMS Vision VxML servers and Golden Dynamic’s VOIR Mobile TV application

Slide 18

www.nmscommunications.com19

SMART Communications

Philippines’ leading mobile operator with over 30 million subscribers.

Nationwide WCMDA 3G coverage. Most advanced SMS-based mobile

commerce services

Launched Video Avatar service built with NMS’ patent pending Video-SMS mobile applications component

NMS provides a unique turnkey solution for both 2G and 3G users – combined with innovative revenue sharing business model

Slide 19

www.nmscommunications.com20

OnMobile

South Asia’s leading content aggregator and technology enabler 4.7 Billion calls per month Over 300 million subscribers.

Initially deployed NMS technology for network based speech-enabled Voice Portals.

Follow-on project - major market share in the sub continent for providing Ring Back Tones based on NMS platforms.

Recent expansions include launching of Multi Modal Services including Infotainment, Interactive Media and Mobile Marketing .

NMS chosen for its technological superiority and value. Ongoing close partnership with OnMobile sales and technical teams to bid and win new business.

Slide 20


NTT Comware

Nippon Telegraph and Telephone - required an IP based Integrated Voice Response and conference server for Japanese telecom providers

NTT Commware chose NMS CG 6000 platforms for new IVR application Natural Access API support of conferencing- new feature built for

NTT Commware Scalable media processor allows for subscriber growth Support of IP and TDM vocoders on a single platform NMS development team delivered on time and in budget

NTT recognizes NMS as a valued partner for all voice portal opportunities

Slide 21


Siemens

Large European car manufacturer used Siemens AG’s HiPath Corporate Connect Solution for follow-me service anywhere in the world

NMS won Siemens HiPath solution NMS scalable and low cost per port Open Access media processors and

APIs Open Access API consistency and flexibility NMS in depth understanding of how to optimize Open Access to meet

Siemens business needs Siemens customer installed HiPath Solution with NMS

Single number service for all customer employees - vs managing 2-3 numbers per employee

Cost savings through least call routing of calls internally and to external locations

Siemens expanded client’s communication infrastructure due to NMS flexibility and integration capabilities

Slide 22


NMS Communications Performance

Slide 23

Market challenges Industry consolidation China 3G Delays Low end erosion

Growth drivers New design wins Mobile subscriber & VAS demand New technologies R&D investment 18% growing to 20% +

Continued strength in margins > 65% gross margin > 20% contribution margin


Financial Overview


Balance Sheet(In $Millions except DSO and Inventory Turns)

Dec '06 Dec '07

Cash & Securities $32.3 $30.2

Inventory $3.6 $2.7

Accounts Receivable $13.3 $13.6

Other Assets $20.2 $21.1

Total Assets $69.3 $67.6

Liabilities $14.3 $17.1

Deferred Revenue $4.4 $3.4

Stockholders' Equity $50.6 $47.1

Total Liab. & S.E. $69.3 $67.6

DSO with Deferred Revenue 55 Days 51 Days

Inventory Turns with Deferred Inventory 8.5X 9.9X


$s MillionsQ4 '06 Q1 '07 Q2 '07 Q3 '07 Q4 '07

Revenues $20.9 $18.0 $20.6 $21.2 $22.6

Gross Margin $13.5 $10.7 $12.8 $14.1 $14.5

Operating ExpensesSG&A $9.4 $9.2 $9.0 $9.4 $9.4R&D $5.1 $4.5 $4.5 $4.3 $4.5Restructuring $4.2 $0.0 $0.0 $0.0 $0.0

Total Opex $18.7 $13.7 $13.5 $13.7 $13.9

Operating Income ($5.2) ($3.0) ($0.8) $0.4 $0.6

Slide 26

NMS Corporation P&L (Non-GAAP*)

Q1 & FY ’08 Guidance (as of February 7th, 2008)• Q108 revenues higher than Q107…approximately 10% - 15%

down from Q407• Expect a modest operating loss for Q108 on a non-GAAP basis• Expectations for 2008 full year revenue are for growth in Live

Wire Mobile of 40% - 45% and about flat for NMS Communications business

• Expect to be modestly profitable for the year on a non-GAAP basis

* Non-GAAP excludes stock-basedcompensation and amortization ofacquired intangible assets:Q406-$1.5M Q107-$1.6M Q207-$1.6M

Q307-$1.5M Q407-$1.5M


Investment Summary

LiveWire Mobile

Rapid growth… business model shift…profitability in FY09

NMS Communications

Highly profitable…flat growth near-term and modest growth long-term

Corporate

Strong balance sheet… improving P&L

nms communications corporation investor summary february 2008

Documents

mobile operators

mobile identity

mobile data services

virgin mobile usaslide

mobile experience simple

managed service exampleslide

services focus developers

ringback actuals