Investor Presentation. July 2018 NASDAQ: MOSY

Transcription

1 Investor Presentation July 2018 NASDAQ: MOSY

2 Safe Harbor Statement This presentation may contain forward-looking statements about MoSys, Inc. (the Company) for purposes of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange act of 1934, as amended, including, without limitation, benefits and performance expected from use of its embedded memory and interface technologies and integrated circuit (IC) products, improving operational efficiencies, the timing of product development and shipments of the Company s IC products, anticipated benefits and performance expected from the Company s IC products, growth in the size of the market addressed by the Company s business, future markets and future business prospects. Forward-looking statements are based on certain assumptions and expectations of future events that are subject to risks and uncertainties. Actual results and trends may differ materially from historical results or those projected in any such forward-looking statements depending on a variety of factors. These factors include, but are not limited to the following: our inability to raise sufficient capital through our current common stock offering; a substantial increase in the number of shares of our common stock to be outstanding through our current stock offering, which may have a dilutive impact on the price of our common stock; a lack of working capital to aggressively fund product development and growth; a lack of working capital to repay the convertible notes due in August 2019, unless we raise sufficient capital through our current common stock offering; achieving additional design wins for our IC products through the acceptance of our IC architecture and interface protocols by potential customers and their suppliers; the timing of customer orders and product shipments; customer concentration; lengthy sales cycle; our ability to enhance our existing proprietary technologies and develop new technologies; achieving necessary acceptance of our IC products by equipment suppliers to the cloud networking, data center, security and other systems markets; difficulties and delays in the development, production, testing and marketing of our IC products; reliance as a fabless semiconductor manufacturer on our manufacturing partners to assist successfully with the fabrication of our ICs; availability of quantities of ICs supplied by our manufacturing partners at a competitive cost; level of intellectual property protection provided by our patents, the expenses and other consequences of litigation, including intellectual property infringement litigation, to which we may be or may become a party from time to time; vigor and growth of markets for cloud networking, data center, security and other systems served by our licensees and customers; and other risks identified in MoSys most recent reports on form 10-K and form 10-Q filed with the Securities and Exchange Commission, as well as other reports that MoSys files from time to time with the Securities and Exchange Commission. MoSys undertakes no obligation to update publicly any forward-looking statement for any reason, except as required by law, even as new information becomes available or other events occur in the future. Copyright 2018 MoSys, Inc. All rights reserved. 2

3 Fast, Intelligent & Secure Cloud Networking Fabless semiconductor company enabling fast, intelligent and secure data throughput for cloud infrastructure OEMs Industry Leading Serial Intelligent Memory ICs Engine - BE-1, 2, 3 Serial memory with intelligent statistics offload Programmable Search Engine - PSE Serial memory with integrated search-optimized processors NASDAQ: MOSY ISO 9001:2008 Certified HQ: San Jose, CA ~125 Patents & Pending Patented Serial Memory Technology Hold fundamental patents for serial memory Low-latency interface, protocol and memory Established Customers & Ecosystem Leading OEMS in Cloud Networking and Security Accelerate high-speed FPGA data processing New opportunities in Test/Monitor, Smart NIC, Video Copyright 2018 MoSys, Inc. All rights reserved. 3

4 Cloud Services, Mobility, IOT, Video Users Demand Speed, Security and Consistency Mobile 3G 5G IOT New Consumer Social Media Business Services CRM, ERP, Office Gaming OTT Video Services 4K 8K Massive Device Count Higher Speed Network Huge Traffic Many traffic Types Distributed Intelligence Prioritized Security Everywhere AI HPC Database Cloud Applications Data Centers MAPS Cloud Storage Hadoop Optimized Compute per Application / Workload Copyright 2018 MoSys, Inc. All rights reserved. 4

5 Data In / out Legacy Memory is Bottleneck at 100G+ Speed Limited Access Rate, Too Many Pins, Board Area Backplane (Chassis) Packet / Data Processing Cards Memory Look up, Statistics Line Rate Data Configuration Memory Accelerators Data Processing Line Rate Processing FPGA ASIC / ASSP CPU NPU, + Accelerators ASIC, FPGA Appliances / Servers Single /few cards per System Data Processing Cards Router Metro Switch Security Video Smart NIC Chassis Up to 16+ Cards per System Memory Fast Buffer for Low System Latency Memory Large Packet Buffer Data Processing Card Functions: Router, Switch, Security, Monitor/Test, Video, Server Offload

6 MoSys Intelligent Serial Memory Enables Fast, Efficient, Intelligent, Secure High-Speed Serial Memories Deliver Performance Save Pins, Space, Power and Cost Memory Access User- Defined Offload Data 100Gb/s Engine Engine Programmable Search Engine Memory Access Rate Reduce Pins, Space Protocol / Data Parsing FPGA Packet/Data Processing Engine/ Switch FPGA Engine DRAM Large Packet Storage Copyright 2018 MoSys, Inc. All rights reserved. 6

7 Proven Ecosystem Accelerating Design Time & Lowering Risk for New Designs Scheduler Proven Platforms and Ecosystem with Xilinx and Altera/Intel FPGAs Altera Stratix IV, Stratix V, Arria 10 Xilinx Virtex -6, Virtex-7, UltraScale MoSys Provides Reference Designs to Speed Customer Design Process PSE-S30 Engine IC 1T-SRAM Memory Controller & App Functions GCI* PCS / Framer Tx Rx 4, 8 4, 8 GCI Tx Rx Tx Rx Processor Engines (PE) PE PE PE 1Gb Memory SerDes Interface Rx Tx ALU Macro Functions Bit Safe Technology Source: Company Management *MoSys interface Copyright 2018 MoSys, Inc. All rights reserved. 7

8 Applications Need High Access Rate Target Customers Throughout Cloud, Security, Data Center, Video Access Cisco, H3C, Huawei, Ericsson NEC, Fujitsu, Hitachi Wireless / Ethernet DLAM EPON / GPON Access New Markets Video BRCST, 8K Sony, JVC, Panasonic, NEC Evertz, NHK, Media Links Aggregation Cisco, Nokia, Juniper, Huawei ZTE, Fujitsu, NEC, Hitachi, H3C Edge Routers Service Routers Metro Ethernet Switch Aggregation Gov t / Industrial Raytheon, Lockheed, Boeing Core Cisco, Nokia, Juniper Ciena, Fujitsu, Huawei, Infinera, ADVA Optical Transport Core Routers Core Government Agencies Test / Monitor Spirent, Ixia DC Security / Edge Palo Alto Networks, Cisco, Fortinet F5, A10, Radware Data Centers Cisco, Arista, Juniper, Huawei, H3C White Box / ODM for Google, Microsoft, Amazon, FaceBook Security DPI Load Balancing Switch / Routers NIC / Smart NIC Servers DC Security Edge Data Centers Cloud Data Center / Networks Enterprise Napatech, Gigamon, Netscout Xilinx, Intel Smart NIC Microsoft, Amazon, Google, FaceBook Note: Companies listed include both actual and prospective customers for target markets; listings are not all-inclusive. Copyright 2018 MoSys, Inc. All rights reserved. 8

9 Data From Network Data From Network Applications in Metro Ethernet & Routers Engine Wins on Performance, Size, Pins, Power, Cost Metro Ethernet (First design win ) 100G Buffer, Lookup and Statistics Carrier traffic classification features at line rate 4-9 units per card, 4-10 cards per system Edge Router (First design win ) 400G Oversubscription Traffic smoothing prevents dropped packets 1-4 units per card, 4-10 cards per system Engine 2 Engine 2 MAC FPGA ASIC Framer FPGA Classify FPGAs ASSP Switch Engine 2 Engine 2 Engine 2 Engine 2 Advantages vs. Alternatives Memory access performance Impossible with traditional memory Lower - pin count, area, power, cost Memory access performance RLDRAM won t fit or route Copyright 2018 MoSys, Inc. All rights reserved. 9

10 Data From Network Data Center Applications Cloud 100G, Security & SDN Drives New Requirements Network Backplane Data Center Security (First design win ) Routers/Appliances (First design win ) Security Acceleration Threat Prevention multiple lookup and buffering functions 2-4 units per card, 1-10 cards per system Added Memory BW to NPS400 Accelerated Search Tables 2 units per card, 4-10 cards per system Engine 2 Engine 2 Mellanox NPS-400 CPU Security FPGA Engine 3 Z30 Engine 2 Mellanox NPS-400 Advantages vs. Alternatives Memory access performance RLDRAM won t fit or route Adds 50% more memory BW Accelerated table look up Small packet performance Copyright 2018 MoSys, Inc. All rights reserved. 10

11 New Applications Video Frame Buffers & Custom Search Network Backplane Video (First design win ) Data Center SDN Switch (New App Example) High Speed Frame Buffer Enable High-Access Buffer and Editing 1-2 units per card, 1-4 cards per system Custom Search & Statistics Accelerate Routing and Switch Functions 2-4 units per card, 1-10 cards per system 4K/8K FPGA 4K/8K FPGA Programmable Search Engine Parsing FPGA Programmable Search Engine Engine 2 Engine 2 ASSP Chassis Switch Key Engine / PSE Architecture Advantages Memory / Access Rate Board Size BE3 option: share between FPGAs Memory Features Custom Search Performance Copyright 2018 MoSys, Inc. All rights reserved. 11

12 Relieving Key System Constraints Significant Advantages over Legacy Memory Solutions High-Access Processing / Fast Buffers Attribute QDR SRAM/RLDRAM Engine System Speed Gbps Number of Chips 4-8 4x 1-2 Pin Count x Power (W) x 8-16 BE2 Xilinx Virtex 6, 7, UltraScale Up to 4x Improvement Performance # Chips Pin Count Board Area Power Altera Stratix IV, V, Arria 10 BE2 Source: Company Management Copyright 2018 MoSys, Inc. All rights reserved. 12

13 Flexible Intelligence Differentiated Product Family Engine & Programmable Search Engine Serial Interface, Integrated Fast Memory & Flexible Intelligence Programmable PSE MSPS30 Fixed Macro Functions BE2-820 Macro BE3-830 Macro BE3-630 Burst Z30 for NPS-400 BE1 MSR576 BE2-620 Burst Serial Memory 10G / 576Mb Serial Interface / Capacity 15G / 576Mb 25G / 1Gb Copyright 2018 MoSys, Inc. All rights reserved. 13

14 Expanding Market Opportunities New Markets Requiring & Access Performance Existing Roadmap Addresses Growing Markets - Leading edge performance - Future optimizations in software Indust / Gov t Acceleration Smart Switch & NIC SDN, Big Data Long Product Life: 5-10 Years Monitor & Test Video Broadcast, 8K New Emerging Market Opportunities >$500M Market* Security Appl. Metro Ethernet Growth in Existing Markets Router >$500M Market* * Market definition and other information is based on management opinion. Copyright 2018 MoSys, Inc. All rights reserved. 14

15 Experienced Management Team Len Perham CEO Jim Sullivan CF0 John Monson VP Sales & Marketing Michael Miller VP System Applications Sinan Doluca VP Engineering & Operations Copyright 2018 MoSys, Inc. All rights reserved. 15

16 Improving Financial Results Path to Non-GAAP Profitability $ in millions, except EPS $5.0 $4.5 $4.0 $3.5 $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 Revenue 3Q17 4Q17 1Q18 2Q18 $1.0 $0.5 $0.0 -$0.5 Adjusted EBITDA* 3Q17 4Q17 1Q18 2Q18 License/Royalty IC Revenue -$1.0 * Adjusted EBITDA defined as GAAP net income (loss) before interest expense, income tax provision, depreciation and amortization, as well as stock-based compensation, intangible asset amortization and restructuring/ impairment charges. See reconciliation of GAAP to non-gaap financial information on slide 22. Copyright 2018 MoSys, Inc. All rights reserved. 16

17 Improving Financials $ in millions, except EPS Non-GAAP* Q3 17 Q Q1 18 Q2 18 Total Revenues $ 2.5 $ 3.8 $ 8.8 $ 4.2 $ 4.6 Product Royalty/other Product GM % 44% 41% 40% 57% 55% Total GM % 49% 45% 47% 62% 60% R&D SG&A Total Op Ex Key Initiatives: Establish Sales & Operational Scale Achieve/maintain Profitability Reduce Cash Burn Improve Cash Position Op Income (Loss) (1.3) (0.1) (7.9) Net Inc (Loss) $ (1.5) $ (0.1) $ (8.5) $0.5 $0.5 Adjusted EBITDA** $ (1.0) $ 0.1 $ (7.1) $0.9 $0.9 EPS $(0.18) $(0.01) $(1.16) $0.06 $0.06 * Non-GAAP: Excludes stock-based compensation, amortization of intangibles and restructuring/impairment charges. See reconciliation of GAAP to non-gaap results on slide 21. ** Adjusted EBITDA defined as GAAP net income (loss) before interest expense, income tax provision, depreciation and amortization, as well as stock-based compensation, intangible asset amortization and restructuring/impairment charges. See reconciliation of GAAP to non-gaap financial information on slide 21. Copyright 2018 MoSys, Inc. All rights reserved. 17

18 Target Operating Model Targets Near Term Long Term Revenue Growth (YoY) Established design win base Long term - leverage BE3 and PSE 75%+ YoY 25%+ YoY Gross Margin Improvements from volume efficiency Align price/capacity/cost 50%+ 60%+ Operating Margin* Revenue growth Improved gross margin Reduced OpEx 0-5% 20%+ Cash Flow $3.6M 6/30/18 Declining Cash Burn Cash- Generating * Non-GAAP measure that excludes restructuring and impairment charges, stock-based compensation expenses and amortization of intangibles Copyright 2018 MoSys, Inc. All rights reserved. 18

19 Balance Sheet Q2 - June 30, 2018 (in millions) Cash & Investments $3.6 Total Assets $21.9 Convertible Notes* $9.6 Deferred Revenue $1.6 Total Liabilities $13.5 Stockholders Equity $8.0 * Feb amended terms: i) extended maturity to Aug 2019, ii) reduced interest rate to 8% PA (PIK) and iii) reduced convert price to $4.25 per share Copyright 2018 MoSys, Inc. All rights reserved. 19

20 Investment Highlights IC Products Solve Key Networking & Cloud Challenges Highly Differentiated Solutions, Very Long Product Life Cycles Market Trends & Partnerships Pave Way for Future Success Growing Business, Improving Financials - Path to Profitability Dedicated Organization, Proven Veteran Leadership Fast, Intelligent & Secure Data Throughput Copyright 2018 MoSys, Inc. All rights reserved. 20

21 Reconciliation of GAAP and Non-GAAP Financial Information $ in 000s Q3 17 Q Q1 18 Q2 18 GAAP net income (loss) $ (1,743) $ (526) $ (10,668) $ 348 $ 315 Stock-based compensation expense Restructuring & impairment charges , Amortization of intangibles Non-GAAP net income (loss) (1,469) (62) (8,516) EBITDA adjustments: Depreciation Interest expense Prov (benefit) for income taxes 4 (249) (233) 1 1 Adjusted EBITDA $ (1,043) $ 105 $ (7,075) $ 860 $ 880 Copyright 2018 MoSys, Inc. All rights reserved. 21

22 Thank You 1T-SRAM, Engine, the GigaChip logo, and MoSys are registered trademarks of MoSys, Inc. in the US and/or other countries. Bit Safe, GigaChip, LineSpeed, and the MoSys logo are trademarks of MoSys, Inc. All other marks mentioned herein are the property of their respective owners. Copyright 2018 MoSys, Inc. All rights reserved.