February 3rd, 2020 - DSP Group Inc.
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
February 3rd, 2020
Forward Looking Statements
This presentation contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if proven incorrect, could
cause DSP Group's results and projections to differ materially from those expressed or implied by such forward-looking statements. All statements
other than statements of historical fact may be deemed forward-looking statements, including statements regarding market expansion of
products for new applications and our ability to capture a higher share of those markets, market expansion in VoIP, new shipments in SmartVoice,
home gateway and ULE markets, and financial guidance for the fourth quarter of 2019. We do not endorse the financial forecasts of any analysts
or comment on them if they differ from our own projections. Nothing in this presentation should be construed as a profit forecast. Past
performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or implied, is
made regarding performance. Information, opinions, and estimates contained in this presentation reflect a judgment at its original date of
publication by DSP Group and are subject to change without notice. We assume no obligation to update any forward-looking statements or
financial guidance. Risks and uncertainties that could cause actual results to differ materially include: delays in the introduction of new products;
slower than expected change in the nature of the residential communications domain; our ability to develop and produce new products at
competitive costs and in a timely manner, including VoIP, SmartVoice, ULE and home gateway products; the possibility that such products may fail
to achieve broad market acceptance; the anticipated annual decline of the secular telephony market and our ability to offset the decline with
revenues from new products; our ability to manage costs; and assumptions pertaining to the level of demand for products that incorporate our
technologies. For more information regarding the risks and uncertainties that could cause actual results and projections to differ, as well as risks
relating to our business in general, see the discussion in the "Risk Factors" section of our Annual Report on Form 10-K for fiscal year 2018 and
other reports that DSP Group has filed with the U.S. Securities and Exchange Commission. This investor presentation is updated as of February 3rd
2020
Private and Confidential. Copyright DSP Group, 2020. All rights reserved. 2
Our Voice will
be LOUDER this
Year!
Capitalizing on our leadership in voice AI
and IoT technologies, well positioned to
disrupt bourgeoning markets with a
larger TAM
DSP Group >1B >200
(est. 1986) Products w/
DSP Group
patents
filed/granted
Leading global provider Inside
of voice AI and IoT
technologies
1994 10
Publicly locations
traded
#1 350
position in VoIP employees
for Office and
Enterprise
Unified Communications SmartVoice SmartHome (IoT) Cordless Phones
32% Revenues 16% Revenues 14% Revenues 38% Revenues
• Comprehensive UC SoC offering • VUI SoC offering with low power Edge AI • Wireless IoT infrastructure based • SoCs for Cordless phones
• Best in class voice engines and algorithm • HDClear for best in class far field on ULE
suite performance • Offering superior range, fidelity, RT
• HQ audio codecs • HQ codecs and ANC voice and audio support
GROWTH MATURE
Our SAM is expected to grow 2.1b
45% to 2.9B units ($6.5B) by 2025
1.5b
600m
200m 400m
150m
UC SmartVoice SmartHome
2020 SAM (Units) 2025 SAM (Units)
Growth Initiatives Comprise Majority of Revenues and
Drive Higher Gross Margins
100%
80%
51%
60% 47% 49%
40% 40% 42% 44%
40%
20%
15% 21% 28% 43% 46% 55% 63%
0%
2013 2014 2015 2016 2017 2018 2019
Growth Initiatives (% of Rev.) Gross Margins
Growth Initiatives Drive Future Growth and Leadership in
Voice AI and IoT Technologies
Revenues in millions
15% $74 -21%
$67
12% $64 $53 -18%
$57 $44
$38
$39
$35
$16
$14
$17
$19
$11
$5
2017 2018 2019
2017 2018 2019
SmartVoice SmartHome UC Cordless
The Market Leader for Unified Communications SoCs
Voice & Video over IP phones Cordless IP systems
• Decline 1-3% • 25% growth
~40% • High quality desktop phone is still demanded in ~10% • DECT based phones growing due demand for
the UC era. High-end Android phones emerge for mobility and ease of deployment
voice, chat, and collaboration apps
IP phones in the SMB/SIP phones 1~8-port ATA (Analog Telephone Adapter)
• +10% YoY growth • Flat
~40% • Strong push of hosted SIP & cloud UCaaS by the ~5% • demand in SMB for analog phone/fax; New
operators and ITSP’s opportunities of cloud-to-phone-line voice bridging
Room conferencing phones New and vertical markets
• +5-10% growth • 5-10% growth
~5% • lower-end segment emerging for SMB and Emerging • Demand for higher quality voice in IP door phone and
huddle rooms for open workspaces intercom markets
• Growing categories of IoT hubs and smart assistants
Our Market Differentiation and Value Proposition
Market focus Voice mobility with DECT
Complete ASSP’s portfolio Mature & complete software
Dedicated R&D and
Superb voice algorithms
customer support
Eco-system of partners for
System cost optimization
complete product solution
Serving All Major UC OEMsSmartVoice Key Verticals
and Market trends
Tablets & PCs Cameras TV/entertainment Hearables Smartphone
VUI (Voice User Interface) Voice is undergoing an Voice activated TVs, RCUs, The bourgeoning market of VUI is integral part of
becomes interface of choice change in terms of OTT streamers and STB are smart wearables such as smartphones, what
in tablets. Used to control enhancing voice and audio gradually evolving from wireless earbuds with active started mainly in high
smart home and user experience from basic push to talk VUI, to a noise canceling augmented end models has now
entertainment applications. Standard Definition to High rich far field, always on and hearing, and increased become mainstream in
Definition, from limited handsfree experience, control over ambient sounds mid-low end devices
interface to VUI and a need supporting mid to far field is propelling the demand for
for a natural, robust far field voice activation. Low power edge AI and active noise
& two-way voice covering VUI is becoming increasingly cancelling headphones
both indoor and outdoor important for stand by
conditions. devices like set top boxes
and TVs to comply with
Energy Star requirementsSmartSpeaker Wearable Tablet Smartphone IoT
Products
integrating F4
Gear S2
Tab ActivePro
S7 S7 Edge S7 A8 A8+
Hero6 Hero7 Hero8 Max
SmartVoice Tab-S5e Tab-View2
Solutions
S Light A8 Star A8s A9s
Microdot XS Gear Sport Tab-A10.5 Tab-S4 Luxury Ultra 4K Pro 3 Doorbell
Portal TV
P3
Bonito A9 A9 Pro A9 Star A9 StarLite
YouXuePai
issex idreamX 优学派 OneRemote
Sero
BN59-01312A
MAVID LS5BV Umix6 U36
> 30 Vendors Reno Z Reno Reno2
PS10 B550 S5 S3 Pro
> 70 products DSPG 3-
mics Ref
Kit Aston Two Office Smart Realme X2 K5
> 80Mu shipped
Cervical Massager GM9Pro
Portable projector
Sugar
Light Smart
ZOE Echo Frames Smart Tab S11
TB-X605F Voice
P10/M10
HOMIX Smart
Alexa Adapter Nortek Libris 2.0
Yoga Smart-Tab M8 Smart-Tab T9 thermostatSmart Home
Market Trends Winning Factors for ULE
• The millions of homes where voice control has gained a • Interference free spectrum
foothold for smart home adoption will be a fertile ground
for the wider adoption of a growing range of additional • Superior range
smart home devices
• Natural two-way voice,
• Security SPs need a reliable solution for 2-Way Voice to turn minimal latency and
the home security system into a communications control guaranteed QOS
center, covering the entire home with intercom and a direct
audio channel • Enhanced securityMore Leading Companies Adopting ULE as Their Primary IoT Solution SmartHome & Consumer Security Industrial
Press and Awards DECT Ultra Low Energy (DECT ULE) integration will pair with Blue by ADT sensors and keypad, coming this spring, enabling the camera to function as a security hub.
Focused on
Cash Flows 2015 $9.9M
Free Cash Flows *
Last Five Years (US $) 2016 $14.4M
Total: $44.3M
2017 $7.7M
Total Cash Position as of
December 31st’, 2019 (US $):
$131.3M 2018 $7.5M
No Debt 2019 $4.8M
Cash flows from operations minus CapexShareholder
Friendly
Approach
2015 $13.2M
Share Buyback
Last Five Years (US $) 2016 $10.7M
Total: $40.7M
2017 $4.5M
2018 $12.3MQ1 2020 Quarterly Guidance
(Non GAAP)
Revenues Gross Margins OpEx LPS
$28M-$30M 50.0%-52.0% $15.0M-$17.0M ($0.01)-($0.03)Short & Long-Term
Target Model
2019 Actual Short Term Long Term
Revenues $117.6M 5%-10% 10%-15%
Non-GAAP Gross Margin 51.0% 50%-53% 53%-56%
Non-GAAP R&D 28% 24%-28% 15%-20%
Non-GAAP Operating Expenses 48% 40%-45% 30%-35%
Non-GAAP Operating Margin 3% 7%-13% 15%-20%Key
Takeaways
Reached an Exciting Established Financially Well positioned for
inflection point, position and franchise disciplined, significant long term
growth initiatives momentum businesses in strong balance revenue growth and
expected to in three three highly sheet and continued margin
account for > 60% dynamic valuable and shareholder expansion in 2020
of revenues in 2019 markets thriving verticals friendly and beyondYou can also read
