Investor
Presentation
December 2023
1
Disclaimers
Forward-Looking Statements
This presentation includes "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. KORE's actual results may differ from their expectations, estimates and projections and consequently, you should not rely on these forward-looking statements as predictions of future events. Forward-looking statements generally are accompanied by words such as "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "expect," "should," "would," "plan," "predict," "potential," "seem," "seek," "future," "outlook," "target" and similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding the benefits of the acquisition of Twilio's IoT assets, estimates and forecasts of revenue, adjusted EBITDA and other financial and performance metrics, future capital availability, projections regarding recent customer engagements, projections of market opportunity and conditions, the total contract value (TCV) of signed contracts and potential revenue opportunities in KORE's sales funnel, and related expectations. These statements are based on various assumptions and on the current expectations of KORE's management. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as and must not be relied on by any investor or other person as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of KORE. These forward-looking statements are subject to a number of risks and uncertainties, including general economic, financial, legal, political and business conditions and changes in domestic and foreign markets; the potential effects of COVID-19; risks related to the rollout of KORE's business and the timing of expected business milestones; risks relating to the integration of KORE's acquired companies, changes in the assumptions underlying KORE's expectations regarding its future business; our ability to negotiate and sign a definitive contract with a customer in our sales funnel; our ability to realize some or all of the Total Contract Value (TCV) of customer contracts as revenue, including any contractual options available to customers or contractual periods that are subject to termination for convenience provisions; the effects of competition on KORE's future business; and the outcome of judicial proceedings to which KORE is, or may become a party. If the risks materialize or assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that KORE presently does not know or that KORE currently believes are immaterial that could also cause actual results to differ materially from those contained in the forward-looking statements. In addition, forward-looking statements reflect KORE's expectations, plans or forecasts of future events and views as of the date of this presentation. KORE anticipates that subsequent events and developments will cause these assessments to change. However, while KORE may elect to update these forward- looking statements at some point in the future, KORE specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing KORE's assessments as of any date subsequent to the date of this presentation. Accordingly, undue reliance should not be placed upon the forward-looking statements.
Use of Projections
This presentation also contains certain financial forecasts of KORE. KORE's independent auditors have not studied, reviewed, compiled or performed any procedures with respect to the projections for the purpose of their inclusion in this presentation, and accordingly, neither of them has expressed an opinion or provided any other form of assurance with respect thereto for the purpose of this presentation. These projections are for illustrative purposes only and should not be relied upon as being necessarily indicative of future results. The assumptions and estimates underlying the prospective financial information are inherently uncertain and are subject to a wide variety of significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the prospective financial information. Projections are inherently uncertain due to a number of factors outside of KORE's control. Accordingly, there can be no assurance that the prospective results are indicative of future performance of KORE or that actual results will not differ materially from those presented in the prospective financial information. Inclusion of the prospective financial information in this presentation should not be regarded as a representation by any person that the results contained in the prospective financial information will be achieved.
Use of Non-GAAP Financial Measures
In addition to our results determined in accordance with GAAP, we believe the following non-GAAP measures are useful in evaluating our operational performance. We use the following non-GAAP financial information to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors in assessing our operating performance.
"EBITDA" is defined as net income (loss) before interest expense or interest income, income tax expense or benefit, and depreciation and amortization. "Adjusted EBITDA" is defined as EBITDA adjusted for unusual and other significant items that management views as distorting the operating results from period to period. Such adjustments may include stock-based compensation, integration and acquisition-related charges, tangible and intangible asset impairment charges, certain contingent liability reversals, transformation, and foreign currency transaction gains and losses. EBITDA and Adjusted EBITDA are intended as supplemental measures of our performance that are neither required by, nor presented in accordance with, GAAP. We believe that the use of EBITDA and Adjusted EBITDA provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company's financial measures with those of comparable companies, which may present similar non-GAAP financial measures to investors. However, you should be aware that when evaluating EBITDA and Adjusted EBITDA we may incur future expenses similar to those excluded when calculating these measures. In addition, our presentation of these measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Our computation of Adjusted EBITDA may not be comparable to other similarly titled measures computed by other companies, because all companies may not calculate Adjusted EBITDA in the same fashion.
Because of these limitations, EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using EBITDA and Adjusted EBITDA on a supplemental basis. You should review the reconciliation of net loss to EBITDA and Adjusted EBITDA below and not rely on any single financial measure to evaluate our business.
We have not provided the forward-looking GAAP equivalents for the forward-lookingnon-GAAP financial measure Adjusted EBITDA or a GAAP reconciliation as a result of the uncertainty regarding, and the potential variability of, reconciling items including but not limited to stock-based compensation expense, foreign currency loss or gain and acquisition and integration-related expenses. Accordingly, a reconciliation of this non-GAAP guidance metric to its corresponding GAAP equivalents is not available without unreasonable effort. However, it is important to note that material changes to reconciling items could have a significant effect on future GAAP results and, as such, we also believe that any reconciliations provided would imply a degree of precision that could be confusing or misleading to investors.
2
Summary Messages and 2023 Outlook
Added over 3.5 million
Connections YTD
through Q3'23
Total Connections now ~18.9 million
Added $87 | Global Sales | Deleveraged | Reducing Annual |
million of TCV | Pipeline | ||
Balance Sheet and | Operating Expenses | ||
year-to-date | almost 1,700 | ||
Increased Cash | by $10 million in 2024 | ||
through Q3'23 | Opportunities as of | ||
Flow Flexibility | |||
(+12%) | September 30, 2023 | ||
Well Positioned for Growth and Value Creation
$280-290mm | $60-62mm |
2023 Revenue | 2023 Targeted |
Outlook | Adjusted EBITDA |
3
KORE at a glance
Leading global, independent provider of mission critical IoT solutions
Who We Are
Why We Win
- Market leader in enabling end-to-end IoT solutions for enterprises
- Trusted advisor, enabling our customers to Build, Deploy, Manage and Scale their IoT solutions
- Blue chip customer base including market leading Fortune 500 enterprises and innovative solutions providers across high growth verticals such as connected health, industrial IoT, asset monitoring, fleet management and comms. services
- Proprietary IP-basedservices: IoT Connectivity, Solutions & Analytics
- Market leading IoT knowledge and experience to help navigate the complex IoT ecosystem
- Global independent IoT connectivity and solutions enabler with an integrated network of key partners
- Deep vertical expertise in our top 3 verticals
Global Scale (as of 9/30/23) | Significant Visibility & Profitability1 | ||||||||
190+ | 45 | 18.9mm | $268mm | $63mm | 91%+ | ||||
Key | Annual Recurring | ||||||||
Countries Coverage | Carrier Integrations | Connections | 2022A Revenue | 2022A Adjusted EBITDA | Gross Margin | ||||
Attributes | 3,600+ | 600+ | 12.7% | 95%+ | |||||
Customers | Full-Time Employees | 2020A-2022A Organic | Revenue Visibility | ||||||
Connectivity Revenue CAGR | Through 2023E2 | ||||||||
1 As reported metrics, unless otherwise noted; 2 Revenue visibility excludes the impact of the Twilio IoT business acquisition and is based on the installed base which includes customers which had a signed contract with KORE by the end of 2022, normalized for non-core customers from the acquisitions of Raco and Wyless
4
KORE business model: offering high demand IoT services
Product line | Products | Product description | Primary pricing method | |||
IoT
Connectivity
66% of 20221
80% of Q3 20232
IoT Solutions
34% of 20221
20% of Q3 20232
IoT
Connectivity
as a Service
(CaaS)
Connectivity
Enablement
as a Service
(CEaaS)
IoT Device
Management
Services
IoT Security
Location
Based Services
(LBS)
- IoT connectivity services offered through market leading IoT platform 'KORE One'
- Our IoT connectivity solutions allow devices to seamlessly and securely connect anywhere in the world across any connected network, which we call our multiple devices, multiple locations, multiple carriers CaaS value prop
- Connectivity Management Platform as a Service (or individual KORE One engine)
- Cellular Core Network as a Service (cloud native HyperCore)
- Outsourced platform-enabled services (e.g., logistics, configuration, device management)
- Sourcing of 3rd party devices globally, device design and selection services
- KORE's SecurityProTM SaaS platform
- KORE's PositionLogicTM SaaS platform and LBS APIs
Per subscriber per month
for lifetime of device
(7-10 years and growing)
Multi-year contracts with
automatic renewals
Upfront fee per device or per device per month
Per subscriber per month
Per subscriber per month
Product list is being expanded e.g., through industry pre-configured solutions
1 Percentage of revenue from all customers (go-forward and non-core) for the year ending December 31, 2022. 2 Percentage of revenue from all customers (go-forward and non-core) for the quarter ending September 30, 2023
5
IoT use cases are everywhere… deployments are complex
- Sample IoT use cases
- Top challenges in IoT deployments
Fleet Mgmt.
Home
Security
Offender Trackers
Smart City
Lighting
Systems
Connected
Blood Sugar
Monitors
Connected
Gas Tank
Monitors
Connected
Alcohol
Monitors
Smart Meters
Inability to
contextualize
and
analyze data
Lack of solution deployment planning and experience
Lack of in-
house IoT
expertise and
resources
Fragmented
ecosystem
requiring multiple partners
Risks and
pitfalls in IoT
Security
Challenges in interoperability and compatibility
Issues in
compliance
with
regulations
6
Successful IoT Deployments Require 7 Key Steps
IoT Strategy | Technology | Connectivity , | Deployment | Operations | Sustainment | Analytics & | |||||||||||||||
& End-to-end | Evaluation, | Device & Data | (forward | Management & | (reverse | ||||||||||||||||
1 | 5 | 7 AIoT | |||||||||||||||||||
Security | 2 Selection, Dev | 3 Management | 4 logistics) | Support | 6 logistics) | ||||||||||||||||
services | through Network(s) Partners | Forecast | Technical Support | Asset | Data Cleansing & | ||||||||||||||||
1.1 | Business Outcomes / | 2.1 | Architecture | 3.1 | Selection / | 4.1 | 5.1 | 6.1 | 7.1 | ||||||||||||
Business Case | Management | Tier 1 & 2 | Management | Normalization | |||||||||||||||||
Carrier Contracts | |||||||||||||||||||||
1.2 | Security by Design | Connectivity / | Secured Data | Supply Chain | Tier 3 - | Site | 7.2 | Data Storage, | |||||||||||||
2.2 | 3.2 | 4.2 | and Inventory | 5.2 | Network & Systems | 6.2 | |||||||||||||||
(entire stack) | Network Strategy | Exchange | Maintenance | Retrievals & Replays | |||||||||||||||||
Management | Support | ||||||||||||||||||||
1.3 | Partner | IoT Platform / | Subscription | Order and | Remote Device | Reverse Logistics / | Data | ||||||||||||||
2.3 | 3.3 | Lifecycle | 4.3 | Configuration | 5.3 | 6.3 | 7.3 | Contextualization | |||||||||||||
Strategy | Cloud Selection | Management | Asset Recovery | ||||||||||||||||||
Integration | Management | & LBS | |||||||||||||||||||
Proof of | Application Design | Usage | Forward Logistics | Network | Advanced | Data | |||||||||||||||
1.4 | 2.4 | 3.4 | Optimization & | 4.4 | 5.4 | Management & | 6.4 | 7.4 | |||||||||||||
Concept | / Development | / Shipping | Exchange | Visualization | |||||||||||||||||
Fraud Mgmt. | Orchestration | ||||||||||||||||||||
Global / Regional | Device / Module | Sales & | Global Import / | AIoT - | |||||||||||||||||
Selection, | MDM Platform | OEM Warranty | Descriptive, | ||||||||||||||||||
1.5 | 2.5 | 3.5 | Distribution | 4.5 | Export | 5.5 | 6.5 | 7.5 | |||||||||||||
Footprint | Validation & | Management | Management | Prescriptive, | |||||||||||||||||
Setup | Management | ||||||||||||||||||||
Certification | Predictive | ||||||||||||||||||||
Organizational | Develop, Test, | Device | Quality | Security & | |||||||||||||||||
Management, | Regulatory | Migration | Deep Network | ||||||||||||||||||
1.6 | 2.6 | 3.6 | 4.6 | Management | 5.6 | 6.6 | 7.6 | ||||||||||||||
Governance | Prototype & Pilot | Diagnostics & | Compliance | Services | Monitoring using | ||||||||||||||||
(ISO 13485, 9001) | |||||||||||||||||||||
Troubleshooting | Metadata | ||||||||||||||||||||
Business Continuity / | Deployment | Deployment Setup | Site | Change | End of Life | Application | |||||||||||||||
1.7 | 2.7 | 3.7 | 4.7 | 5.7 | 6.7 | 7.7 | Integration & | ||||||||||||||
Disaster Recovery | Process Design | & Optimization | Services | Management | Management | ||||||||||||||||
Device Feedback | |||||||||||||||||||||
KORE Internal | KORE & Partner Hybrid | Partner | |||||||||||||||||||
Delivery: | 7 | ||||||||||||||||||||
Customer case study: Customer #1
Customer #1 is a multinational medical devices company. KORE works with the cardiac monitoring (pacemakers and related devices) division, which is a market leader in this line of products. It has been KORE's customer for >10 years.
Cardiac Device | Bedside Monitor |
KORE Solution: IoT enablement of cardiac devices
- Helped design a custom connectivity device which works with a large number of cellular networks globally; contracted manufacturing with a global contract manufacturer
- KORE is an extension of the customer's supply chain, configuring
- handling 200-300K devices per year (growing 20%+ year) with facilities which are:
- ISO 13485 / 9001 certified
- FDA Registration 21 CFR Part 820 compliant
- HIPAA (U.S.) and GDPR (EU) compliant
KORE CaaS | Physician Portal |
KORE global connectivity
- Provided a global connectivity package to provide connectivity across a large number of countries
- Acting as a trusted advisor for customer with transition of 2G/3G devices to LTE (in 2021/22)
- Almost 1 million subscribers and growing fast, leading to significant CaaS revenue stream for 7-10 years per device
- Upsell to eSIM highly likely given global footprint of services
8
Customer use case: Cardiac rhythm monitoring
KORE's solution enables global deployment and management of regulated medical equipment
Connectivity / Network
Strategy
Hardware
Customization,
Certifications - Gen 9
Network Design
Roaming Footprint
Updates
Subscription Lifecycle
Integration
Wireless Managed
Services
Hierarchical Account Setup & Management
Device Management,
Diagnostics &
Troubleshooting
Deployment Setup &
Optimization
Demand Forecast
Supply Chain
Order Management Patient Order Desk
Firmware Validation
Software Load
Remote Config Updates
Supply Chain
Management & Global
Documentation
Global Import / Export
Management-
Direct-to-Patient/DC
Packaging/Labeling
Final Testing & Validation
Recording
Track & Trace
Technical Support
Tier 2
Tier 3 -
Network & Systems
Support
Regional Outage
Monitoring & Escalation
Quality Management
ISO 13485
FDA Title 21 Part 820
EU MDD/MDR
WEEE 2012/19/EU
HIPAA/GDPR
OPCO Billing
Reconciliation &
Reporting
Change / Release
Management
Advanced Manage
Services
Migration Planning and
Implementation
Returns Handling
Sanitizing, Testing
FDA Reporting
Advance Exchange /
SWAP
OEM Warranty
Management
End-of-Life | Transmission/Outage |
Management | Analytics/Alerting |
Delivery: | KORE Service Delivery | |
9
KORE is well positioned in the early innings of an exciting growth opportunity in IoT
IoT Market ($bn)
Devices (bn)
2020
$382B
$78B $269B
$35B
12%
12%40%
10%
26%
Connected Devices = 22 billion
IoT Devices = 12 billion
2025 | 2030 | |
$906B | ||
$250B | $608B | ~$7 Trillion |
$48B |
Applications & Platforms | Managed Services | Connectivity | 5% | 3% | |||||||||||||
2% | |||||||||||||||||
7% | |||||||||||||||||
5% | 10% | 12% | |||||||||||||||
21% | 57% | ||||||||||||||||
78% | |||||||||||||||||
Connected Devices = 37 billion | Connected Devices = 91 billion | ||||||||||||||||
IoT Devices = 25 billion | IoT Devices = 75 billion | ||||||||||||||||
M2M IoT | Smartphones | PC / Tablets | TVs | Other | |||||||||||||
Source: GSMA (IoT Revenue: State of the Market 2020); Ericsson (Mobility Report 2020); Cisco Annual Internet Report Highlights Tool 2020; IDC (Worldwide 5G Connections Forecast, 2019-2023) and KORE Forecasts
10
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KORE Group Holdings Inc. published this content on 01 December 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 December 2023 14:26:14 UTC.