Comptel Corporation (OMX Helsinki: CTL1V), Target: 2.42

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1 Update () Equity Comptel Corporation (OMX Helsinki: CTL1V), Target: 2.42 Located in Helsinki, Finland, Comptel Corporation (OMX Helsinki: CTL1V Comptel ) is a global leader in developing and deploying software and services that enable high speed, intelligent, and secure mobile applications. Comptel is led by its industry leading operating support system (OSS) platform, which includes service orchestration and intelligent data capabilities. Comptel s technology processes over 500 terabytes of data daily and touches approximately 20% of the world s mobile billing / usage data. Comptel has a world-class customer base and a well-established presence processing large scale mobile data securely in the global communications industry, with approximately 300 digital service and communications providers in 90 countries across the globe, reaching over 1.2 billion people worldwide. Comptel continues to execute in a challenging global environment, with powerful revenue and bookings growth in 4Q15 capping a strong year for the company and a solid outlook for Investment Highlights Very strong 4Q15 as revenue climbed 21.7% YoY to 32.6mn Comptel ended the year with very strong 4Q15 results that were ahead of our estimates and point to continued progress for the company as it moves up the value chain helping top carriers globally deploy and manage new services in increasingly complex IP networks characterized by the proliferation new mobile applications in combination with ubiquitous high speed mobile data. For the quarter, the company reported revenues of 32.6mn, which represented 21.7% annual growth and was well ahead of our estimate for 29.1mn in revenue. Comptel saw strength across the board, with record results in Europe and strong growth in the Asia- Pacific region as well. For the full year 2015, Comptel reported 97mn in revenue up 14% YoY and also ahead of our 2015 estimate of 94.2mn. Comptel ends year with record backlog, positive outlook We were pleased to see Comptel end the year with a record backlog, which should position the company well for growth in 2016E. Despite stiffening headwinds in the global macro-economic environment, Comptel grew its year-end backlog by 20.2% from year-ago levels to a record 66.3mn. Looking ahead to next year, management issued guidance for continued growth on the top line, as well as margin expansion. Comptel is now targeting operating profit margins in a range of 8% to 14% of revenue, which was in line with our thinking. We note that Comptel does experience seasonality, with the second half of the calendar year representing a larger portion of operating profit and sales than he first half of the year. significant opportunities for growth and margin expansion. If achieved, the price target of 2.42 represents potential upside of 55.2% from the recent price of Stock Details (3/1/16) OMX Helsinki: Sector / Industry CTL1V Price target 2.42 Recent share price 1.63 Shares o/s (mn) Market cap (in mn) week high/low 1.93 / 0.90 Source: Thomson Reuters, SeeThruEquity Research Key Financial ( mn, unless specified) FY14 FY15 FY16E Revenues EBITDA EBIT Net Income EPS ($) Source: SeeThruEquity Research Key Ratios FY14 FY15 FY16E Gross margin (%) Operating Margin (%) EBITDA margin (%) Net margin (%) P/Revenue (x) EV/EBITDA (x) NM NM NM EV/Revenue (x) Source: SeeThruEquity Research Stock Performance Price target remains 2.42 We maintain our price target of 2.42 for Comptel at this time. The company appears to be tracking ahead of our initial view following a strong 4Q15, and we are optimistic heading into 2016E. We view Comptel as an attractive company in the technology industry with Source: Thomson Reuters SeeThruEquity, LLC. Important disclosures appear at the back of this report. 1 P age

2 ANNUAL FINANCIAL SUMMARY Figure Income Statement Summary Figures in unless specified 4Q15 4Q14 FY2015 FY2014 Intelligent Data YoY Change 19.8% 7.1% Service Orchestration YoY Change 23.4% 20.1% Total Revenue YoY Change 21.8% 14.0% Other Operating Income Materials & Services Employee Benefits Depreciation & Amortization Other Total Operating Expenses Operating Income Operating Margin 17.2% 14.6% 8.7% 9.7% Other Items Pretax Income Tax 2.0 (0.0) Net Income Other comprehensive Income Comprehensive Income 3.6 3, EPS Source: Company Earnings Release, SeeThruEquity Research Comptel caps off a strong 2015 with robust growth in 4Q15, record backlog despite macro headwinds Strong 4Q15 puts Comptel well ahead of our estimates: We were very pleased with Comptel s strong 4Q15 topline results. The company reported revenues of 32.6mn in the quarter and 97mn for the year, which was well ahead of our estimates for 29.1mn and 94.2mn, respectively. Revenue climbs by 14% in 2015 to reach 97mn: The strong to line performance in 4Q15 was a very strong end to a good year for Comptel, with revenues growing 21.7% YoY in 4Q15 to reach 32.6mn, versus 26.8mn in 4Q14. For the year, revenues of 97mn rose 14% from 85.7mn in Record backlog positions the company well for 2016E: Despite stiffening global macro headwinds, Comptel continued to grow its backlog, positioning the company well as it enters 2016E. Impressively, Comptel grew its backlog by 20.2% from year-ago levels to a record 66.3mn at year s end. Outlook for continued growth and margin expansion: For 2016, Comptel management guided to continued growth in top line sales and an expansion of profit margins. Specifically Comptel is targeting operating profit margins in a range of 8% to 14% of revenue, which was in line with our thinking. We note that Comptel does experience seasonality, with the second half of the calendar year representing a larger portion of operating profit and sales than he first half of the year SeeThruEquity, LLC. Important disclosures appear at the back of this report. 2 P age

3 Comptel experiences strong demand across the board, with sales in Europe near record levels Comptel experienced strong demand across the board, ending the year with a backlog at record levels and impressive new customer announcements across a range of geographies and customers. The company saw particularly strength in APAC and Europe revenue from Europe was at an all-time high for the company at the end of the year Fiscal Period 4Q15 4Q14 YOY Change YOY Change Europe % % Asia Pacific % % Mideast & Africa % % Americas % % Total ( ) % % In terms of products, Comptel grew both its units nicely in The company s core software categories are Service Orchestration which includes the company s fast-growing FlowOne fulfilment solution and Intelligent Data, which includes applications that help network operators better monetize and understand large sets of customer data in real time. Intelligent Data products ended the year strong with 14.8% YoY growth, while Service Orchestration was up 23.4% in the quarter. Comptel continues to build large orders: Consistent with its building backlog, Comptel reported an increase in large orders in 2015, winning 29 new deals worth over 0.5mn versus 26 in Indeed, the company has recently announced several new large deals, including: 1) a multi-year 5mn deal with a British mobile operator for data refinery licenses and support; 2) a 12.5mn deal with Germany s leading mobile operator for Data Refinery and FlowOne fulfillment services, 3) a significant new Data Refinery order ( 1.3mn) from a customer in the Middle East region as part of an ongoing collaboration between the companies; and 4) a new customer win in Thailand for Data Refinery and related implementation and support. FWD Introduced with first new customer: Comptel also announced its first commercial deployment of its new software-as-a-service (SAAS) digital sales channel offering FWD with Finland-based prepaid mobile provider DNA. FWD is Comptel s new SAAS offering for operators, which makes it possible for mobile customers to purchase time-based data packages through a mobile application. Comptel has stated that it is hopeful about the long term potential for the FWD solution, which was launched in November, in prepaid dominant markets including many emerging markets. Maintaining target of 2.42 at this time We maintain our price target of 2.42 for Comptel at this time. The company appears to be tracking ahead of our initial view following a strong 4Q15, and we are optimistic heading into 2016E. We view Comptel as an attractive company in the technology industry with significant opportunities for growth and margin expansion. If achieved, the price target of 2.42 represents potential upside of 55.2% from the recent price of SeeThruEquity, LLC. Important disclosures appear at the back of this report. 3 P age

4 Management Team and Board of Directors Juhani Hintikka, President and CEO Born in 1966, M.Sc. (Engineering). Joined Comptel in Has held several general management and executive positions in research and development, operations and sales at Nokia and Nokia Siemens Networks since 1999, latest the global Head of Operations Support Solutions Business Line at NSN. Has previously worked in Konecranes Group and in KONE Group. Member of the Board of Directors of Comptel Corporation during Michele Campriani, Chief Commercial Officer Born in 1968, M.Sc. (Electronic Engineering). Joined Comptel in 2015, a member of the Executive Board since He has previously held various executive and senior sales positions at Hewlett Packard and Sunrise Telecom. He founded and was CEO of Accanto Systems. Most recently he was International VP of sales at Empirix Inc. Tom Jansson, CFO Born in 1968, M.Sc. (Econ.). Joined Comptel 2013, has previously held several senior finance and control positions during his long tenure at Tellabs, latest Director of Finance International in Tellabs Corporation. Jussi Himanen, Senior Vice President, Corporate Development Born in 1972, M.Sc. (Industrial Engineering) Joined Comptel in 2012, member of the Executive Board since Has previously held various strategy and product management positions in Nokia Siemens Networks and Nokia since Prior to that worked in Sonera during Antti Koskela, Executive Vice President, Service Orchestration Born in 1971, M.Sc. (Engineering). Joined Comptel in 2011, member of the Executive Board since Has previously held several management positions in Nokia Siemens Networks since 1999, latest Head of the Communication & Entertainment Solutions Business Line at. Prior to that, worked in Ericsson during Kari Onniselkä, Executive Vice President, Intelligent Data Born in 1967, M.Sc. (Economics). Joined Comptel in 2011, member of the Executive Board since Acted earlier as Managing Director of Talent Partners since Prior to that, held several management positions at Nokia in Niina Pesonen, Senior Vice President, Human Resources Born in 1965, M.Sc. (Social and Behavioral). Joined Comptel in 2007, member of the Executive Board since Has previously held several HR management and development positions in Nokia since Her latest positions were Business HR Director for the Delivery Operations of Nokia Networks and HR Head for North East Region in Nokia Siemens Networks.. Ari Vänttinen, Chief Marketing Officer Born 1969, M.Sc. (Economics). Joined Comptel in 2014, member of Executive Board since Has previously held various marketing executive and management roles at McAFee and Stonesoft Plc since Before that management consultant at Talent Partners and marketing management and business development roles at Nokia Networks SeeThruEquity, LLC. Important disclosures appear at the back of this report. 4 P age

5 About Comptel Corporation Life is digital moments. Comptel perfects these by transforming how you serve, meet and respond to the needs of Generation Cloud customers. Our solutions allow you to innovate rich communications services instantly, master the orchestration of service and order flows, capture data-in-motion and refine your decision-making. We apply intelligence to reduce friction in your business. Comptel has enabled the delivery of digital and communications services to more than 1 billion people. Every day, we care for more than 20% of all mobile usage data. Nearly 300 service providers across 90 countries have trusted us to perfect customers digital moments. Comptel.com SeeThruEquity, LLC. Important disclosures appear at the back of this report. 5 P age

6 CONTACT: Amit Tandon Director of Research SeeThruEquity, LLC (646) Jay Albany Associate Director of Research SeeThruEquity, LLC (646) DISCLOSURE: This report has been prepared and distributed by SeeThruEquity, LLC. This report is based on sources that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. All information contained herein is subject to change without notice. This report is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Clients should consider whether any information in this report is suitable for their particular circumstances and, if appropriate, seek professional advice, including tax advice. Statements included in this report may constitute forwardlooking statements within the meaning of the Private Securities Litigation Reform Act of Such statements involve a number of risks and uncertainties such as competitive factors, technological development, market demand and the company's ability to obtain new contracts and accurately estimate net revenues due to variability in size, scope and duration of projects, and internal issues. SeeThruEquity has not been compensated for the preparation of this report. SeeThruEquity and/or its affiliates may have a long position with respect to the publicly traded shares of the subject company covered in this report. SeeThruEquity, LLC is not a broker-dealer and does not generate any investment banking or commission-based revenue with respect to the securities of the company described herein. Our professionals may provide oral or written market commentary that reflects opinions that are contrary to the opinions expressed in this report. The price and value of the investment referred to in this report may fluctuate. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Certain transactions, including those involving futures, options, and other derivatives, give rise to substantial risk and are not suitable for all investors. Our report is disseminated primarily electronically, and, in some cases, in printed form. Electronic report is simultaneously available to all recipients in any form. The information contained in this report is not incorporated into the contents of our website and should be read independently thereof. Copyright SeeThruEquity, LLC. No part of this material may be (i) copied, photocopied or duplicated in any for by any means or (ii) redistributed without the prior written consent of SeeThruEquity, LLC SeeThruEquity, LLC. Important disclosures appear at the back of this report. 6 P age