Corporate Presentation
Safe Harbor Statement
Except for statements of historical fact, the information presented herein constitutes forward-looking statements within the meaning of and subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as "expect," "estimate," "anticipate," "intend," "predict," "believe," and similar expressions and variations thereof. Such forward-looking statements include statements regarding the intent, belief, current expectations or projections about future events of Aladdin Knowledge Systems Ltd. Readers are cautioned that these forward looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Aladdin Knowledge Systems Ltd. to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include without limitation, general economic and business conditions, the loss of market share, changes in the competitive landscape, failure to keep up with technological advances and other factors over which Aladdin Knowledge Systems Ltd. has little or no control. Aladdin Knowledge Systems Ltd. undertakes no obligation to revise or update these forward-looking statements to reflect events or circumstances after the date hereof.
Headquarters:
Tel Aviv, IsraelGlobal Presence:
Strong Financial
Momentum:
Founded:
1985, publicly traded since 1993Employees Worldwide:
468 Q1/08 revenues: $30.0M Q1/08 profits: $2.5M (Non-GAAP) 2007 revenues: $105.9M 2007 profits: $17.6M (Non-GAAP)World Renowned
Products:
Global leader in Software DRM (Digital Rights
Management), fast growth, innovative Enterprise
USA, UK, Germany, France, The Netherlands, India, Spain, Italy, Japan and China
Aladdin: Securing the Global Village
Our Mission
•
To create value by enabling the secure use
and distribution of digital content
Our Vision
•
To be the leading provider of innovative
security solutions to protect digital assets
and enable secure business
Aladdin Product Lines
Software Rights Management –
copy protection, IP protection
and secure licensing
solution for software vendors
Software
Publishers
and System
Vendors
Solutions for authentication
and password/digital identity
management
Enterprise
Education
Banking
Pharmacy
Government
TARGET MARKETWeb gateway content security
and proactive email security
Enterprise
and ISP’s
Q1 2008 Earnings Results
•
Revenue:
$30 million
–
SW DRM Revenue: $19m
–
Enterprise Security Revenue: $11m
•
Operating Income:
*$2.2 million
•
Net Income:
*$4 million
•
Earnings Per Share:
*$0.29
•
Cash: **
$95 million
* Non-GAAP
▲
+ 20%
▲
+ 32%
AUTOMOTIVE BANKING B-TO-B C-TO-C ENTERPRISE SECURITY EDUCATION E-COMMERCE GOVERNMENT GAMING HEALTHCARE MANUFACTURING PUBLISHING LAW ENFORCEMENT SPORTS▲
+ 19%
▲
+ 12%
Aladdin Growth Strategy 2008-2009
China India Emerging Markets Education Banking FORTUNE 100s xSPs SRM for Licensing Compliance-driven For xSPsGeographies in 2008-2009
•
India
–
New Subsidiary with Sales and R&D facilities
–
CIITE, large eToken and eSafe deal with IT university students
–
Certificate Authorities (CA’s)
•
China
–
New office in Shanghai
–
Wicresoft: A significant distribution agreement with joint
Government/Microsoft venture
•
Emerging Territories
–
Latin America
•
Current Territories
–
Continued Growth in Europe
Quarterly Revenues are Growing
Diversified Revenue Streams
North America: 19% Europe: 63% ROW: 18%Business Segments: Geographical Segments:
37%
Growth in Profitability
Net Income
Healthy Balance Sheet
US $mm 12/31/2006 12/31/2007 3/31/2008
Cash and Cash Equivalents 39,734 77 86,044
Marketable Securities 51,147 13,127 8,981
Held for Sale Investment 4,423 2,336
Trade Receivables 16,427 16,918 17,975
Other Account Receivables 5,779 7,061 6,727
Inventories 7,299 8,763 11,351
Severance Pay Fund 3,153 3,853 4,556
Fixed Assets, Net 5,695 6,501 7,240
Other Long Term Assets, Net 19,290 12,195 20,133
TOTAL ASSETS 148,524 150,050 165,343
Trade Payables 5,794 8,236 9,636
Deferred Revenues 5,399 6,635 6,738
Other Current Liabilities 8,618 8,583 10,104
Accrued Severance Pay 3,921 4,802 6,027
Other Long Term Liabilities 2,143 2,564 3,358
Non-controlling interest 6,039
2008 Guidance
Revenues
•
$123 million to $130 million
Compared to: $105.9 million in fiscal year 2007
EPS
•
GAAP: $1.08 to $1.18
Compared to: $1.02 in fiscal year 2007
•
Non-GAAP: $1.20 to $1.30
Compared to: $1.20 in fiscal year 2007
Lowered EPS guidance is a result of:
•
Strong Israeli shekel
HASP SRM Software Rights Management
•
Enables business growth by delivering:
–
Strong copy protection
–
Robust protection for Intellectual Property
–
Secure and flexible licensing
Software DRM Market Growth
Software Digital Rights Management Market: Revenue Forecasts (World), 2006-2013
Compound Annual Growth Rate (2006-2013): 12.1%
Note: All figures are rounded; the base year is 2006. Source: Frost & Sullivan
Revenue Growth Rate (%) %
Software DRM – Competitive Positioning
Software Digital Rights Management Market: Competitive Landscape (World), 2006
High
Ability to Deliver DRM Solutions
Low
Low Market Penetration High
Wibu
Macrovision
SafeNet
Aladdin
SW DRM Growth Potential with HASP SRM
•
Existing HASP customers using SW-based solutions (All-in-one)
•
Competitive dongle users using SW-based solutions (All-in-one)
•
Vendors using commercial SW-based solutions (HASP SL)
•
Vendors using home-grown solutions (HASP SL)
•
Vendors not protecting (ease of implementation)
•
Additional growth potential
–
High-end consumer applications
–
Limited size enterprise applications
–
System vendors (applications embedded
in hardware)
Existing HASP/Hardlock customers Not Protecting or Licensing Using Homegrown Solutions Competitor CustomersDisk encryption Boot Protection Enterprise SSO File encryption Dig Sig SSV VPN Secure Net logon VPN
Focusing on Enterprise Solutions
PKI Client OTP Authentication
Single Sign On
Secure Network
Logon SDK
All devices can include RFID
Secure network access Data security Password management
The eToken Product Offering
T
o
ken Management Sy
Authentication Market – Key Growth Drivers
•
Business enablement
–
Strong authentication is increasingly
regarded as a must
•
Regulatory compliance
–
HIPAA, SOX, Basel II, and more
•
Increasingly mobile workforce
•
Digital signature usage and laws
–
European Dig Sig laws, MCA 21 in India,
SAFE
Authentication Market Growth
Source: Frost & Sullivan, “World USB and One Time Password Authentication Markets”, 2007
$76 M
$522 M
LAW ENFORCEMENT
BANKING
ENTERPRISE
“The market is demanding a
secure-Web gateway (SWG) solution that
provides not only traditional
URL-filtering but also malicious
software (malware) filtering, as
well as application control
for Web
applications such as instant
messaging (IM)
.”
Peter Firstbrook
Demand for Secure Web Gateways
Publication: 20 March 2007 ID Number: G00146229
