Commtouch Software Ltd
(NASDAQ: CTCH)
Shlomi Yanai, President
[email protected]
Brian Briggs, CFO
[email protected]
Commtouch, Inc., Headquarters
7927 Jones Branch Drive, Suite 2250
McLean, VA 22102, USA
Tel: 703-760-3320
Fax: 703-760-3321
2 | Investor Overview: Company Confidential Real Security. In Real Time.
Safe Harbor and Forward Looking Statements
This presentation contains forward-looking statements, including projections about our business, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. For example, statements in the future tense, and statements including words such as "expect," "plan," "estimate," "anticipate," or "believe" are forward-looking statements. These statements are based on information available to us at the time of the presentation; we assume no obligation to update any of them. The statements in this presentation are not guarantees of future performance and actual results could differ materially from our current expectations as a result of numerous factors, including business conditions and growth or deterioration in the Internet market, commerce and the general economy, both domestic as well as international; fewer than expected new-partner relationships; competitive factors, including pricing pressures; technological developments, and products offered by competitors; the ability of our OEM partners to successfully penetrate markets with products integrated with Commtouch technology; a slower than expected acceptance rate for our newer product offerings; availability of qualified staff; and technological difficulties and resource constraints encountered in developing new products, as well as those risks described in the text of this presentation and the company's Annual Reports on Form 20-F and reports on Form 6-K, which are available through www.sec.gov.
Commtouch Software Ltd. Recurrent Pattern Detection, RPD, Zero-Hour and GlobalView are trademarks, and Commtouch, Authentium, Command Antivirus and Command Anti-malware are registered trademarks, of Commtouch. U.S. Patent No. 6,330,590 is owned by Commtouch
Leading edge
technology
Recurring
revenue model
Unique
go-to-market strategy
The leading security company you’ve never heard of
Blue chip,
diversified
customer base
Leading market
position
• Patented statistical algorithms (Recurrent Pattern Detection) are future proof, threat agnostic and enable real-time detection
• Pioneered behavior heuristics for anti-virus
• Security as a Service business model
• 100% of revenue recurring, 90% under multi-year contracts • Partner revenue share - share in customers’ success
• Offer a complete cloud based private label security solution to OEMs, service providers and distributors
• Own and operate cloud infrastructure with 12 data centers globally
• Over 180 OEM and service provider customers
• Antivirus solution powers Google’s Gmail and Microsoft offerings
• Messaging security underlies HP’s Unified Threat Management products • ~30% of the mail security market runs on Commtouch software
• Market leading detection services see more than 12 billion transactions/day, over 80x more than any other vendor
4 | Investor Overview: Company Confidential Real Security. In Real Time.
Vendors
Security Hardware | Antivirus | Network Devices | Client Software
Partner focus drives Commtouch success
Commtouch powers 30% of the mail security market
Web App
Service Providers
Hosting | Saas | ISP/Telco
•
Patented anti-spam
technology
•
Pioneered
cloud-assisted detection
•
First to block image
based spam
•
Language agnostic
•
New threats distribution
unique diagnostics
Cloud-based detection a key competitive advantage
6 | Investor Overview: Company Confidential Real Security. In Real Time.
Large, high growth market opportunity
“
Good opportunities
are being
made available in a number of
security segments to
technology
and service
providers
with
cloud
delivery capabilities
”
Gartner, Market Trends: Cloud-BasedSecurity Services, September, 2012
2013
2016
“
Security
continues to be
something organizations
can't do
without
. This is especially true as
organizations, of all sizes, turn to
Security Software as a Service
(SaaS)
”
IDC, Worldwide Security Software as a Service 2012-2016$1.8 B
$2.6 B
11%
Web
18%
$1.2 B
Web
$0.6 B
$1.6 B
Web
$1.0 B
CAGR
•
Transforming from a technology service provider to a
complete cloud-based Security-as-a-Service provider
•
New management team located in US, closer to customers
•
New global salesforce focused on lead generation
•
New leading-edge product portfolio:
•
Q1 2013: introduced Mail SaaS, Mobile security for Android, and a
new on-premise solution for service providers
•
Continued technology innovation:
•
Web SaaS to be delivered in Q4 2013
8 | Investor Overview: Company Confidential Real Security. In Real Time.
SMB
Internet
Commtouch Detection services (OEM) offering
Vendor device/
Service Provider
Detection Services
8
Network Model
Financial Impact
•
Low % revenue share
•
Market user price - ~$50
•
For Commtouch:
3-5% from user sell price
“is this
spam?”
Commtouch Private label Security-as-a-Service offering
Network Model
Financial Impact
SMB/
Enterprise
Detection and full
Services
Internet
•
•
High % revenue share (Resell)
Market user price - ~$50
•
For Commtouch:
10 | Investor Overview: Company Confidential Real Security. In Real Time.
Partner benefits:
•
Significantly expands market opportunity beyond large
enterprises to SMBs
•
Increases product and service capability
Enterprise/SMB benefits:
•
Reduces costs (opex vs. capex)
•
Supports service level agreements (SLAs)
•
Enables faster upgrades
•
Solves security issues for out-of-office employees
Commtouch product suite
Hi
gh $
Low
$
WEB
AV/AM
Security SaaS
Cloud-Assisted
Detection
Services
•
Private Label
• Web Service • On Premise • Private Label • Web Service • On Premise$2.8B
*
$2.4B
*
$9.1B
*
•
Web Filtering
•
Messaging
Suite
•
On-premise for
SPs
•
AV SDK
•
Mobile Security
•
Endpoint apps
• APT Detection12 | Investor Overview: Company Confidential Real Security. In Real Time.
Cloud-based detection at the core of product portfolio
•
Commtouch Owned & Operated
•
550M End Users
•
12B Transactions Daily
GlobalView Cloud
•
Over 99% detection accuracy
•
Language agnostic
•
Internal Efficiencies
High Margins
•
12 Global Data Centers
•
Operational for 14 years
•
Zero-hour detection of global threats
•
Industry-leading performance
Recurrent Pattern Detection - Patented technology
Spam and phishing URLs Zero-hour virus samples, Malware URLs Malware URLs Web Antivirus Email
Threat data sharing between
services: Sum is greater than
Email security
Industry-leading spam detection:
•
Phishing message and virus outbreak detection
•
Advanced heuristic malware defense
Benefits:
•
Instant protection from new outbreaks
•
High catch rates with almost zero false positives
•
Language and content agnostic
•
Simple integration
•
High performance, low maintenance
•
Reduced capital expenditure
14 | Investor Overview: Company Confidential Real Security. In Real Time.
Antivirus
Anti-malware solution for service provider email
and web security gateways:
• Cloud-based pattern detection
• Multi-layer file scanning
Benefits:
•
High performance
•
Superior detection
•
Ease of integration and operation
•
Reduced capital expenditure
Web security
URL Filtering (URLF) enables customers to provide
new levels of service for:
•
Web security
•
Parental control
•
Business productivity management and compliance
•
Mobile devices
Benefits:
•
Cloud database provides broadest coverage
•
Real-time, zero-hour security
16 | Company Overview Real Security. In Real Time.
16 | Commtouch Web Security SaaS Real Security. In Real Time.
Web Security – The challenge
Branch office 1
Internet
Email GW Web GWBranch office 2
Applications FW Email GW Web GW FWUser apps
Cloud
apps
Mobile
Users
Infected
site sends
malware/
phishing to
user
Branch office 1
Branch office 2
ApplicationsMobile
Users
Web SecaaS
Infected
site sends
malware to
user
Malware
blocked
Internet
Phishing site
blocked
18 | Investor Overview: Company Confidential Real Security. In Real Time.
•
Product:
ReadyNAS®
network attached storage
(NAS)
•
Target Market:
Small and
medium businesses as
well as enterprises
•
Commtouch Service:
Antivirus
Customer case study: Netgear
“Security is a key factor in offering
efficient NAS solutions. With
Commtouch Antivirus, we can
provide our customers with
state-of-the art protection from both
known and new viruses, Trojans
and other malware threats.”
Davin Oishi, senior product line manager for NETGEAR Storage
•
Product:
Web hosting,
online marketing
•
Target Market:
Small
businesses
•
Commtouch Services:
Inbound Anti-Spam,
Outbound Spam Protection,
Virus Outbreak Detection
Customer case study: Web.com
“With the addition of Commtouch
services, we can now better safeguard
our customers from the nuisance of
spam emails, without the risk of having
their critical communications erroneously
blocked.”
20 | Investor Overview: Company Confidential Real Security. In Real Time.
World class, experienced management team
Pete Shah - Senior Vice President, Worldwide Sales
Joined in 2012, bringing over 20 years of experience with international software organizations.
Haniel Ilouz - Vice President, Global Engineering
Has over 14 years of software development experience including extensive management of large global engineering teams.
Brian Briggs - Chief Financial Officer
Joined in 2013, bringing more than 22 years of finance and operations experience building and growing profitable companies.
Joy Nemitz - Chief Marketing Officer
Has over 20 years of technology and communications experience in the field of Cloud,
SaaS and Hosted Services marketing.
Mickey Avram - Vice President, Technology Services
Joined in 2012, bringing over 20 years of experience in the support and operations management field, many of these in the security industry.
Lior Kohavi - Chief Technology Officer
Has more than 20 years of experience as a senior technology executive..
Lior Samuelson – Chairman and Chief Executive Officer
Joined in 2010 as Chairman and became CEO in 2013.
Brett Wilson - Vice President, Products
Has over 20 years of technology and communications experience, including more than 10 years of experience in the information security industry.
Eva Edwards Markowitz - Vice President, Human Resources
Joined in 2013, bringing over 14 years of human resource experience.
Shlomi Yanai - President
Joined in 2011, bringing over two decades of experience in the information security industry.
Sue Perng Lee - Vice President, General Counsel &
Corporate Secretary
Joined in 2013, bringing over 10 years of legal experience in both the private law firm and corporate settings.
Assured
backlog
100%
Strong business model
3 Years
Higher rate renewal
Recurring
revenue
model
0 Months
Deal signed – 3 year revenue commitment 1.5 Years Increased sales 3.9 7.2 11.3 14.1 15.2 18.2 23.0 24.1 32-33 -5 0 5 10 15 20 25 30 35 40 2005 2006 2007 2008 2009 2010 2011 2012 2013 $ i n m ill io n s Revenue Operating Profit Operating Cost CoGs
•
Recurring revenue and long term contracts provide
stability and visibility
•
Highly profitable core business supports investments
in new growth initiatives
•
Solid balance sheet - $4 million in cash and no debt
as of September 30, 2013
22 | Investor Overview: Company Confidential Real Security. In Real Time.
