Pareteum Corporation Company Overview · Business Model: Cloud Delivered Services & MRR 121% 121%...

Pareteum CorporationCompany Overview• August 6, 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

• $276 M contractual revenue backlog (as of June 30, 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 (8/3/18): $2.92

Analysts Price Targets: $3.10 - $4.50*

Avg. Daily Trading Volume for 3 Months (ending 8/3/18): 1.4 M

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

Market Cap (8/3/18): $160 M

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

36 Month Contractual Revenue Backlog (6/30/18): $276 M

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

Equity Snapshot

5© Pareteum 2018 (NYSE American : TEUM) Complete with accompanying oral presentation 5

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


Consumer & App Products

Platforms

Media & Content

Payments

TelcosCSP

Networks

IoT

Services

Age of the Ubiquitously Connected: it can be puzzling

Insights & Analytics

Blockchain

30 Billion *Connected Devices

* 30 Billion IoT Connected Devices by 2020 from Hewlett Packard

Customers Ecosystems

Payment Systems

IT Systems Connected Things

‘Smart’ Verticals

Intelligence

Throttling

Blocking Paid prioritization


1. Managed Services Platform

Mobile Virtual Network Enabler (MVNE)

Pareteum Strategies: Open Mobility & Applications Software (APIs)

Any Device, Anywhere

Software defined platform enabling real-time:-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)-Predictive analytics “insights”, Reporting, Artificial Intelligence, Machine Learning,…-Identity Management and Security, Blockchain, Mobile payments, cryptocurrencies,…-Connectivity/access

3. TEUM Application Exchange Platform(IoT)

SuperAPIEnterprise/Developer Tool Kit

Connectivity Enabled

2. Global Software Defined Cloud

Complete Turnkey Cloud Solutions enabling rapid

market entry and connectivity


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


Ecosystem = Open Mobility & Open Applications Networks:64M Wi-Fi Hot Spots in 180+ Countries + 1,200 GSM + CDMA SMS Agreements + 53 MNO Global Agreements in 76 Countries … Growing


Where We Are Going In 2018

28.5 M WiFi hot spots 46 M WiFi hot spots 36 M WiFi hot spots 4 M WiFi hot spots


Latin America770 M

North America430 M

Africa1,770 M

Europe1,190 M

AsiaPac4,820 M

Artilium + Pareteum = Global Solutions9 B Worldwide Mobile Subscriptions by 2022*29 B Worldwide IoT Connections by 2022*

*June 2017 Ericsson Mobility Report https://www.ericsson.com/assets/local/mobility-report/documents/2017/ericsson-mobility-report-june-2017.pdf

Teaming Agreement

Strategic Alliance

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

$62.5 BRevenue

111,556Employees

469.7 MConnections

13 MFixed

Broadband

9.5 MTV

Subscribers

38 MIoT

Connections

25 MMobile Money

Subs.

26Country

Operations

50Add.

Countries Partnerships

https://www.ericsson.com/assets/local/mobility-report/documents/2017/ericsson-mobility-report-june-2017.pdf


28.5M46K

2.2M

1.8M

31M

iPass + Pareteum = Global Connectivity Access for Open Mobility and Open Applications

*June 2017 Ericsson Mobility Report https://www.ericsson.com/assets/local/mobility-report/documents/2017/ericsson-mobility-report-june-2017.pdf

Teaming Agreement

Strategic Alliance

Latin America770 M

North America430 M

Africa1,770 M

Europe1,190 M

AsiaPac4,820 M64M+ Wi-Fi Hot

Spots in 180+ Countries

1,000+ GSM and 200 CDMA SMS

Global Agreements

48 MNO Global Agreements in 73

Countries

https://www.ericsson.com/assets/local/mobility-report/documents/2017/ericsson-mobility-report-june-2017.pdf


36M-CRB 2018 YTD: financial results follow

5 4 5

14

5 62

13

27$20

$14$20

$54

$23 $23

$10

$55

$109

0

20

40

60

80

100

120

-

20

40

60

80

100

120

Jan-18 Feb-18 Mar-18 Total18Q1

Apr-18 May-18 Jun-18 Total18Q2

2018 YTD

In M

illio

n

88% increase as of

December 31st 2017

QoQ Av. 36M-CRB per deal

increased 10%

• Torrid sales pace: • 27 new contracts in 26 weeks

for YTD 2018 • Revenue Outlook RAISED to > 80%

YoY• Affirmed full year positive:

• cash generated from operations

• EBITDA


Business Model: Cloud Delivered Services & MRR

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

90 days

30 days

30 days

120 days

30 days

30 days

Prospect toContract

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

x 1,000

Q1 2018

Actuals

Q2 2018

Actuals

(Q3-Q4)

2018 36M-

CRB

Total

2019 2020 Total

EMBEDDED BASE CUSTOMERS

36 Month Contracted Revenue Backlog (CRB) Live and in Service 4,113$ 6,003$ 8,242$ 18,358$ 21,654$ 30,873$ 15,656$ 76,425$

36 Month CRB: In Deployment and Service Establishment -$ -$ 9,441$ 9,441$ 47,393$ 98,122$ 69,786$ 224,742$

TOTAL REVENUE BACKLOG 4,113$ 6,003$ 17,683$ 27,799$ 69,047$ 128,995$ 85,442$ 301,167$

July 31, 2018

(Q1 + Q2)

2021

2018

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)

• 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



Sequential Quarterly Key Metrics

($000's) Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018

Revenue 3,239 3,499 4,015 4,113 6,003

Year-Over-Year Revenue Growth (28) (1%) 328 10% 870 28% 1,318 47% 2,764 85%

Gross Margin 2,293 71% 2,707 77% 2,910 73% 2,918 71% 4,223 70%

Adjusted EBITDA 463 603 708 283 1,297

EBITDA (301) (35) (2,733) (869) 597

Cash Balance 742 700 13,538 15,759 19,205

36 Month Contractual Revenue Backlog 60,000 94,000 147,000 200,000 276,000


Key Business Highlights for Second Quarter 2018:• Awarded 13 new customer contracts:

• $55 million to 36-month Contractual Revenue Backlog (36MCRB)

• Increased 36MCRB:• $200 million at Q1 end • $276 million at Q2 end (includes $21 million incremental from existing contracts)• $300 million on July 31, 2018;

• Contractual Revenue Backlog conversion rate at 106%

• Ended the second quarter of 2018 with 2,713,600 Connections:• 225% increase over the end of the second quarter of 2017• 23% higher than the first quarter of 2018



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

• Current Market Cap: $160 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 $276 M as of 6/30/18•36MCRB multiple only 0.58x

•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

$160$216 $240 $264 $288 $312

$-

$100

$200

$300

$400

7 9 10 11 12 13

Revenue Multiple ($16.5 M)$ Millions

$160 $276$552

$828

$0

$500

$1,000

0.58 1 2 3

Backlog Multiple (Currently $276 M)$ 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 = $1.656 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


Capitalization Table as of July 31, 2018

Common

TEUM (000's) Share Fully

Equivalents Warrants Options Diluted

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

Convertible Debt 48 732 780

Preferred Shares -

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


0.00%

0.10%

0.20%

0.30%

0.40%

0.50%

APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN

Churn By Month

Connection Churn .27% Avg. for Q3

Connection Churn .14 Avg. for Q2



Company OverviewKPI’s – Company Snapshot


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73

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14

-5,000

0

5,000

10,000

15,000

20,000

25,000

Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018

Pareteum Quarterly Historical Financials

2017 Annual

Churn 2.1%


$11.12 $12.39$8.90 $10.85

$3.52 $0.42 $0.88 $1.35

3.800.41 1.19 1.49

17.18 15.1319.56

28.81

05

1015202530

Q3 Q4 Q1 Q2

Connection: Cost of Acquiring and Value LifetimeAnnual Value $

Acquisition Cost $

Payback Months

Life Yrs

YRS YRSYRS

MonthsMonthsMonths

YRS

Months

~$50

$212 $225 $233 $256$377

$0

$200

$400

Q4 15 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18

Tho

usa

nd

s

Average Annualized Rev/Employee

$191.04 $187.46 $174.08

$312.59

$0

$100

$200

$300

$400

Q3 Q4 Q1 Q2

Connection: LTV Value

654% Rev/Employee

growth on18Q2 vs 15Q4

Company OverviewKPI’s – Company Snapshot

Pareteum Corporation Company Overview · Business Model: Cloud Delivered Services & MRR 121% 121%...

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