NMS Communications. Slide 2 Safe Harbor Statement This presentation may contain projections or...

NMS Communications

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.


NMS Communications at a Glance

Applications & platforms for value-added services Leader in ringback tone service deployments Technology expertise spans network to handset Products deployed in operator networks in 100+ countries 25 year history of successes and industry “firsts” 400+ employees; global presence


Investment Summary

Focused on high growth Value Added Services markets

Implemented cost reductions and strategic shift to lower cost development

RBT leader introducing new applications, extended services & new business model

Technology business entering strong new products cycle

www.nmscommunications.com

Operator Conundrum

Voice MOU continue to rise: price continues to drop

Not enough ROI for network and technology investments made

Operators need new and innovative value added services to grow

Operators need more help making VAS successful

$85 billion services market in 2005 – growing to $206 billion in 2010


Mobile Centrex

Video messaging

Mobile video services

Voice and Video SMS

Video, audio and web conferencing

IVVR

Speech-driven applications

Contact center solutions

Unified communications

IP PBX

Modular Application Platforms Open Access

™ and Vision

Platforms for voice, video, and data applications and services Any network, anywhere,

TDM, IP, IMS Software, components &

servers, cPCI, PCI Express, AdvancedTCA

Fast time-to-market Leading technology, tool

set for development and deployment

World class supply chain, global support


$36

$2.00

$5.00

$0.12

Example

RBT 1st Yr Value Per Sub

Incr

easi

ng

Val

ue

Building & Sustaining Value

Services RevenueSubscription + Content + Access

Technology

Applications

Professional & Managed Services

$85 Billion Services Revenue

I&C, M&S, Pro ServicesManaged Services


MyCaller Ringback

Diverse personalization options Viral marketing accelerators Complete content management Comprehensive reporting

Any phone, any network Drive subscription and

content revenue Business & Ad models

Features

Value Proposition

Unique Selling Points

First in operator deployments Ringback knowledge experts Marketing services capabilities


MyCaller Ringback Subscribers

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

5,000,000

Jan-05

Feb-05

Mar-05

Apr-05 May-05

Jun-05

Jul-05 Aug-05

Sep-05

Oct-05 Nov-05

Dec-05

Jan-06

Feb-06

Mar-06

Apr-06 May-06

Jun-06

Jul-06 Aug-06

Sep-06

Oct-06 Nov-06

Dec-06

Jan-07

Feb-07

Mar-07

-

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

140,000,000

Total Subs RBT Subs


MyCommunityTM Messaging

Personalized multimedia messages Easier to use than texting Wide repertoire of avatars, other

content

Any phone, any network Drives transactions revenue New source of content revenue

Features

Value Proposition

Unique Selling Points

Voice and video functionality Talking video message (Avatar) First to market Build on MyCaller investment


Strategic Summary

Services RevenueSubscription + Content + Access

Technology

Applications

Professional & Managed Services

$85 Billion Services Revenue

I&C, M&S, Pro ServicesManaged Services

Move to revenue share model

Extend technology leadership New design win focus 3rd Party developer focus

Build RBT footprint Expand applications offerings

Expand & enhance services offerings


Business Plan & Financial Overview


Product Line Revenues

Slide 13


Balance Sheet

$20 million share repurchase

(In $Millions except DSO and Inventory Turns)

Mar '06 Jun '06 Sept '06 Dec '06 Mar '07

Cash & Securities $61.7 $57.9 $35.9 $32.3 $30.2

Inventory 3 $4.4 $2.8 $4.4 $3.6 $3.8

Accounts Receivable $20.4 $17.8 $15.2 $13.3 $12.1

Other Assets $21.5 $22.0 $20.8 $20.2 $20.2

Total Assets $108.0 $100.5 $76.3 $69.3 $66.3

Liabilities $15.1 $13.9 $13.2 $14.3 $13.6

Deferred Revenue $7.7 $4.6 $5.2 $4.4 $5.8

Stockholders' Equity $85.2 $82.0 $57.9 $50.6 $46.9

Total Liab. & S.E. $108.0 $100.5 $76.3 $69.3 $66.3

DSO with Deferred Revenue 60 Days 61 Days 66 Days 55 Days 57 Days

Inventory Turns with Deferred Inventory 10.8X 10.3X 9.3X 8.5X 8.4X

Slide 14


Target Business Model** (Non-GAAP)

**Not including impact of stock-based compensation and amortization of acquired intangible assets

See press release and SEC filings for further information

Mobile Apps Pipeline

Rev Share Bus Model

Right-sizedLow Cost Devel.

B/E 2H07*

*Guidance as of 4/26/07:

• Q2 revenue substantially higher, 50% reduction in non-GAAP Loss

• Expect to operate at about breakeven levels on a non-GAAP basis for 2H 2007

$s Millions Target FY 2006 FY 2006 Q107 Q107Model

Revenues 100% $99.6 100% $19.0 100%

Gross Margin 63-65% $64.8 65% $11.6 61%

Operating ExpensesSG&A 26-29% $44.3 45% $9.9 52%R&D 16-18% $25.4 26% $5.4 28%Restructuring - $5.5 5% $0.0 0%

Total Opex 42-46% $75.2 76% $15.2 80%

Operating Income 17-21% ($10.4) -10% ($3.7) -19%

High Leverage

Drivers


Success in 2007

Multi-year view Value creation through VAS leadership and profitable growth

Financial turnaround Break-even or better operations by H2

Approach target model by late 2008/2009

Setting up growth and a solid 2008 Double “subscribers passed”

3X increase in subscribers

2-3 new applications

Begin shift to “by the drink” revenue model

Major new design wins

Continue tight expense control


NMS Communications

NMS Communications. Slide 2 Safe Harbor Statement This presentation may contain projections or...

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