F e b r u a r y 2 0 0 6 Welcome to Our World The Global VoIP Company Ofer Gneezy President & CEO OTCBB: IBAS 12/05
Safe Harbor Statement Except for historical information, all of the expectations, projections and assumptions contained in the following presentation, including those relating to the company's current expectations regarding revenue growth, sources of revenue, margin improvement, profitability, future capital expenditures, and cash flows, constitute forward-looking statements under the Private Securities Litigation Reform Act of 1995 and involve risks and uncertainties. Important factors that could cause actual results to differ materially from such forwardlooking statements include, but are not limited to, (i) the extent of adoption of the company's services and the timing and amount of revenue and margin generated by these services; (ii) fluctuations in the market for and pricing of these services; and (iii) the other considerations described as "Risk Factors" in the Company s most recent Forms 10-K and 10-Q, and the company's other SEC filings. We have no current intention to update any forward-looking statements.
Global VoIP: It s Our World! 500 450 400 350 300 250 200 150 100 50 0 12 10 8 6 4 2 0 Revenue In Millions 2000 2001 2002 2003 2004 2005 2006 F Minutes In Billions 2000 2001 2002 2003 2004 2005 2006 F * 2005 Minutes 7.7 Billion Revenue $385.5 Gross Profit $49.3 Million 2006 Guidance Revenue $480 - $500 Million EPS $0.05 - $0.08 * Assuming stable ARPM
ibasis Largest International VoIP Network >9 Billion Minutes Annual Run Rate Two Growth Engines: Trading International Voice Traffic Retail International Calling But Some Quarterly Volatility Cash Flow Positive Debt Free Stock Buy-back Program
Financial Performance by Product Q4 2005 Dollars in Millions Trading Retail Total Revenue $87.1 $20.5 $107.6 Gross Profit $9.5 $3.3 $12.8 Gross Margin % 10.9% 16.0% 11.9%
Trading Welcome to Our World
The Big Picture in International Voice Retail traffic is shifting to new carriers: from TDM to VoIP from Fixed to Mobile from PTTs to Local and Emerging Carriers Fueling Growth in Wholesale (Trading)
More Than 390 Customers
Positioned to Capture Traffic 1,000 + Points of Presence in >100 Countries Internet Central Offices ibasis Offices
ibasis Global VoIP Fabric CLI Enabled Mobile Video Enabled Modem Enabled SIP Compliant IMS Compliant (Q4 2006) GRX (in development)
Consumer VoIP in Q4 2005 50% Sequential Revenue Growth 9% of Trading Revenue High margin! 30+ customers $8 $6 Revenue in Millions $4 $2 $0 Q4 '04 Q1 '05 Q2 '05 Q3 '05 Q4 '05
ibasis Offering for Consumer VoIP Companies Enabling VoIP Providers Large international VoIP network Support for marketing/promotional programs Support for variety of VoIP user devices and applications PremiumCertified -- high quality international termination DirectVoIP Broadband -- fast, efficient, and secure IP interconnects Global Access
Trading Business Growing $100 $80 $60 $40 $20 $0 $12 $10 $8 $6 $4 $2 $0 Revenue in Millions Q2 '04 Q3 '04 Q4 '04 Q1 '05 Q2 '05 Q3 '05 Q4 '05 Gross Profit in Millions Q2 '04 Q3 '04 Q4 '04 Q1 '05 Q2 '05 Q3 '05 Q4 '05 Products Directs Directs Plus Premium Certified Direct VoIP Direct VoIP Broadband
Retail Prepaid Welcome to Our World
Retail Business Growing $25 Revenue in Millions Major Metro Markets $20 $15 $10 $5 $0 Q2 '04 Q3 '04 Q4 '04 Q1 '05 Q2 '05 Q3 '05 Q4 '05 ecommerce Channel $4 Gross Profit in Millions $3 $2 $1 $0 Q2 '04 Q3 '04 Q4 '04 Q1 '05 Q2 '05 Q3 '05 Q4 '05
Fast Growth in Southern California Integrated Campaign Radio, TV Billboards In-store Posters
Pingo Affiliate Program Launched late Dec. 800+ Affiliates Chinese New Year, Happy Hour Promotion Internationalization Languages Countries
Financial Summary Welcome to Our World
Scale Leading to Profitability Dollars in Millions 2003 2004 2005 Revenue $178 $264 $385 Income From Operations ($23.4) ($7.5) $3.1
Progress in Bottom Line Not As Obvious Due to Balance Sheet Cleanup Dollars in Millions 2003 2004 2005 Revenue $178 $264 $385 Income From Operations ($23.4) ($7.8) $3.1 Interest Expense, net ($3.8) ($4.0) ($1.5) All Other Items $17.7 ($5.7) ($3.3) Net Loss ($9.7) ($17.5) ($1.7)
Healthy Balance Sheet Dollars in Millions 2003 2004 2005 Cash $17 $39 $44 Total Assets $68 $88 $107 Equity ($42) ($24) $40 Four consecutive quarters of positive cash flow Added $5.6 million for the year 2005
Good Progress Over Last Year Q4 05 vs. Q4 04 43% 20% + 120 Revenue 13 Gross Profit 1 Net Income ($ in millions) 100 12 0 80 11 60 10-1 40 Q4 '04 Q4 '05 9 Q4 '04 Q4 '05-2 Q4 '04 Q4 '05
Strong Improvement over Previous Quarter Q4 05 vs. Q3 05 14% 11% + 110 Revenue 13 Gross Profit 0.75 Net Income ($ in millions) 100 12 0.5 0.25 90 11 0-0.25 80 Q3 '05 Q4 '05 10 Q3 '05 Q4 '05-0.5 Q3 '05 Q4 '05
Guidance The Company believes that in 2006 it will: Achieve revenue in the range of $480 to $500 million; and Achieve EPS of $0.05 to $0.08. Planned cash expenditures for 2006 include: $10 - $12 million in capital asset investment
Margin Expansion Retail Pingo ~35% Disposable Calling Cards Trading Consumer VoIP Mobile Margin Current Traffic Emerging Carriers PTT s Wholesalers 10%
Investment Opportunity VoIP investment Fast-growing business Profitable Generating cash Debt free
Welcome to Our World The Global VoIP Company Thank you.