NQ Mobile Inc. Investor Presentation (NYSE: NQ) November 2014

Transcription

1 NQ Mobile Inc. (NYSE: NQ) Investor Presentation November 2014

2 Safe Harbor The presentation may contain certain forward-looking statements made under the Safe Harbor provision of the U.S. Private Securities Litigation Reform Act of These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectation. NQ Mobile does not assume any obligation to update any forward-looking statements except as required under applicable law. Also please note that some of the information to be discussed includes non-gaap financial measures as defined in Regulation G. The most direct comparable U.S. GAAP financial measures and the information reconciling those non-gaap financial measures to NQ Mobile s financial results prepared in accordance with U.S. GAAP will be included in NQ Mobile s regular earnings releases and filings, which can be found on the Company s Investor Relations website. 2

3 Leading Global Provider of Mobile Internet Services Consumer Mobile Services Full Suite of Security and Produc2vity Apps Gaming Mobile Adver2sing Emerging Products NQ Live Pla?orm (including vlife) Music Radar (audio search) isms (messaging) Yipai (Image based search) Showself (social pla?orm) Enterprise Mobility Managed Mobility Services 3

4 Key Ecosystem Carrier and Channel partnerships Gaming Partners Emerging Products Partners Device Pre-installation Enterprise Partners 4

5 History May 2014 May 2014 Nov 2013 Oct 2013 Sept 2013 Sept 2013 Dec 2012 Nov 2012 Jun 2012 Jan 2012 May Controlling stake in Showself (social entertainment app) Controlling stake in Yipai (image based search) Controlling stake in Yinlong (Music Radar) $172 million Convertible Bond offering to accelerate business trajectory Controlling stake in Best Partners (Ad network) Investment in Huayong (vlife) Acquisition of FL Mobile: expansion into mobile gaming and advertising Mobile Internet Services Platform Strategy Unveiled Acquisition of NationSky: expansion into Enterprise Business Establishment of Global Headquarters in the US IPO and NYSE listing Original funding from Sequoia, Fidelity, and Mayfield with strategic investments from Qualcomm, Mediatek, and HTC Founded 5

6 Consumer Mobile Services Full Suite of Security and Produc2vity Apps Gaming Mobile Adver2sing Consumer Mobile Services Emerging Products NQ Live Pla?orm (including vlife) Music Radar (audio search) isms (messaging) Yipai (Image based search) Showself (social entertainment pla?orm) 6

7 Full Suite of Security and Productivity Apps SECURITY NQ Mobile Security NQ Mobile Security Protects your mobile voice & data from malicious software (viruses, malware), phishing and call eavesdropping Trust PRIVACY NQ Mobile Vault FAMILY NQ Family Guardian NQ Mobile Vault Ensures your digital privacy through active control & on-device encryption of your content & communications Supporting full carrier branding and service integration including distribution, pre-loads, billing, etc. NQ Mobile Family Guardian Augments parenting and child s safety Builds awareness, gain visibility, and provides controls around your children s everyday activities. US Cellular America Movil 7

8 Gaming FL Mobile - A Leading Gaming Publisher in China n Partners include: Tencent, CMGE, Baidu, Ubisoft, Rovio, and China Mobile n Expanding Internationally A top ios mobile game publisher and operator in China Developer Relationships 20 MM+ monthly active users 8

9 Mobile Advertising: NQ Advertising Ad Platform Tracking/Analytics/Reporting Revenue Optimization High Conversion Ads 1,000+ Premium Advertisers 9

10 Emerging Products NQ Live Platform (including vlife) Music Radar (Doreso) isms (Hissage) Yipai (Image Search) Showself (Social Entertainment Platform) 10

11 Managed Mobility Services - NationSky Products and Services Manageability Services Security Industry Solutions Platform Integration Services n n n n Mobile data strategy consulting Architecture design and deployment Asset management Training n n n Mobile device management Mobile content management Mobile application management n n n n Insurance solution Banking solution Public service solution Logistics solution n n n n Enterprise app store Enterprise content distribution Push integration Cross-platform middleware Devices Mobility Application Enablement and Deployment Consulting and Management Services Legacy Enterprise IT Integration Framework Mobility Security Framework Mobility Infrastructure 11

12 Managed Mobility Services NationSky (Cont d) Selected Customers Banking Brokerage Insurance Pharmaceutical Manufacturing Energy 12

13 Massive Market Opportunity for Mobile Internet Services 63,985 Mobile Total App Store Downloads, Worldwide (MM) 102, , , , , E 2014E 2015E 2016E 2017E Source: Gartner (September 2013) China Mobile Games Revenue(RMB Bn) 0.5 Feature phone 1.0 game revenue 1.9 Smart device game revenue E 2014E 2015E 2016E 2017E Source iresearch (October 2013) China Mobile Internet Advertising Spend (US$MM) 2, , ,177.2 EMM Revenue Growth Forecast, Worldwide (US$MM) 1, CAGR: 15% 1,550 1,791 2,003 2, , E 2014E 2015E 2016E 2017 Source emarketer (June 2013) E 2015E 2016E 2017E Source : IDC (2014) 13

14 M&A Strategy n Buy vs. Build Criteria n Strategic Fit and Mid- to Long- Term Potential n Talent Acquisition n Positive Financial Impact n Products and Emerging Technology Targets n Partnership and Customer Reach n Talent n Intellectual Property 14

15 M&A Activity User Acquisi2on Mone2za2on Technology/ Product Sales Channel FL Mobile Gaming & Entertainment Pla0orm Best Partner Mobile Ad Network Huayong (vlife) NQ Live Pla0orm Yinlong Audio Search Yipai - Image- based Search Showself Social Entertainment Network Na2onSky NQ Sky NQ Shenzhen Insurance, EducaEon Ruifeng (RIMI) VerEcal Industry Apps Consumer Enterprise 15

16 Monetization Mobile Value-Added Services Advertising Services Service Revenues Enterprise Mobility Other Services Product Revenues Enterprise Mobility 16

17 Management Dr. Henry Lin Chairman, Co-CEO Omar Khan Co-CEO Dr. Vincent Shi COO, Acting CFO Gavin Kim CCO Conrad Edwards CXO Co-Founder Co-Founder 17

18 Management Hou Shuli NationSky Founder/CEO Dr. Ni Xianie FL Mobile! Founder & CEO Huang Bo WAPS Founder & CEO Yang Xiaofeng vlife Founder & CEO Huang Wei Yinlong Founder & CEO Wan Bo Showself Co-Founder & CEO Dr. Ji Xiang Yipai Founder & CEO! 18

19 Investment Thesis Monetization Traction Advertising Mobile First, Mobile Only Diversified Assets Strong User Acquisition Engine Engaging & Expanding Products and Services We operate with an unwavering commitment to creating, acquiring, growing, and monetizing components of a leading global mobile Internet platform 19

20 THANKS! 20

21 APPENDIX 21

22 Financial Highlights

23 Strong Underlying Operating Metrics Operating Metrics as of 12/31/13 do NOT include emerging products like NQ Live, Music Radar, isms or the user traffic from our ad platform. Active User Accounts (1) Paying User Accounts (1) & Premium User Accounts (2) (M) Q Q CAGR (2) : Total: 108% Q Q Q 2013 China Overseas Feiliu 2Q Q Q 2013 (M) Premium user accounts Q Q Q Q Q Q Q Q The active user accounts and paying user accounts are average monthly numbers for the specified quarter 2 Premium user accounts are any user account that generates revenues either through direct payment or indirect payments from third party developers and advertisers via the offer wall or other form of advertising. 23

24 Rapidly Growing Revenues Revenue (1) ($MM) Up 114 % YoY % 27% % 21% 76% CAGR: 178% % % 44% 51% 45% China Consumer Overseas Consumer Other Enterprise Service Revenue 11% % 14% 10% 0% 74% % 10% 42% Mobile Security Subscription Revenue Mobile Game Revenue Advertising Revenue Other Revenues revenues include full year results for Enterprise (Nationsky) and Feiliu even though they were acquired in 2Q and 4Q, respectively 24

25 Rapidly Growing Revenues (Cont d) Quarterly Revenue ($MM) % % % % % 12% % % % % 10% % 41% % 14% % 45% 45% % % 44% % 45% 43% 39% 33% % 22% 10% 35% 30% % % % % % % % 1.8 5% % 52% % 20% 11% 39% % 12% 28% 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 China Consumer Overseas Consumer Other Enterprise Service Revenue Feiliu Mobile Security Subscription Revenue Mobile Game Revenue Advertising Revenue Other Revenues 25

26 Healthy Profitability Non-GAAP Net Income (1) ($MM) (%) 61.7% 17, % 51.0% 12,325 15,043 14, % 6,996 6,542 6, % 7, % 31.5% 8, % 10, % 36.3% 32.1% 3,101 4, % 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1 Non-GAAP figures, which excludes share based compensation, expenses related to handling short seller allegations, and interest expenses and fair value changes of the embedded call options in connection with convertible debt. The percentage represents the non-gaap operating margin. 26

27 More Details on Products 27

28 Consumer Security Worldwide Partnerships OEMs Carriers Retail Strategic/Others 28

29 Appendix: Consumer Security Suite (Android) NQ Care NQ Family Guardian NQ Mobile Security NQ Vault NQ Easy Finder 29

30 Appendix NQ Premium Features NQ Mobile Security 30

31 Appendix NQ Premium Features (Cont d) NQ Mobile Vault 31

32 Consumer Security and Productivity - Retail From warehouse to point- of- sale Semi- permanent fixtures highlight product offerings, with the opportunity to flex- in new product or promoeonal literature quickly. Web- based acevaeon tools help sales agents get customers up and running, so they can walk out working. Retail material ready- to- ship Point- of- sale presence Product overview and takeaway material PromoEonal material In- store, on- device acevaeon 32

33 FL Mobile Most Popular Games 龙 之 召 唤 Gods and Dragons 神 雕 侠 侣 The Return of the Condor Heroes 傲 世 西 游 神 魔 篇 Journey to the West Mythical Chapter QQ 御 剑 飞 流 至 尊 版 QQ Yujian FL Extreme Edition 武 林 盟 主 Wu Lin Meng Zhu 口 袋 梦 幻 Pocket Dream 33

34 FL Mobile - Products and Services Interest-based social graph Sponsored download Gaming monetization platform Developers Mobile Interest- Based Community Users Content sharing and download Interest-based communities Virtual goods Merchants goods recommendation Promotion rewards Advertisers FL Mobile ad inventory Sponsored recommendaeons Merchant inventory 34

35 Synergistic Businesses Engage Active Users Data Interest-based ü Analyze Communities 136M+ Active Users ü Optimize ü Customize 20M+ Active Users Trusted Platform ü Protect ü Secure ü Prevent ü Socialize ü Share ü Play Monetize 1 All user data as of December

36 FL Mobile Community Products Self-developed and operated community apps are major user acquisition and retention engine! Tech Bible! Download Community! Game Center! 36

37 FL Mobile - Mobile Games and Advertising Platform Mobile Games and Advertising Platform n Founded in 2009 as Feiliu, FL Mobile is a leading mobile interest based social platform in China n Real-time online group activities, built upon unique interest communities including mobile technology, automobile, health care, games, etc. Mobile Interest-based Social Platform n 107M registered user accounts (12/31/13 n 20M+ monthly active user accounts (12/31/13) n n Distribute 400K+ apps/games Leading mobile game publisher on ios platform in China and increasing presence on all smartphone platforms in China 37

38 Advertising Analytics and Operations Platform n Feature-rich, mobile app data analytics platform Provides deep data tracking, statistics, visualization and analysis that delivers actionable insights to help mobile app developers and advertisers n Includes: User Acquisition User Engagement/Behavior User Cohort (Targeting) User Conversion (Funnel) Analytics Campaign Insight 300+ metrics 40+ reports Customized events 38

39 Ad Inventory Banner Ads Brand, Apps, Games, ecommerce Daily Impressions: 150m+ Daily Downloads: 800k Ad Wall / Offer Wall Apps, Games Daily Impressions: 10m+ Daily Downloads: 1m+ 39

40 Ad Inventory (Cont d) Interstitials / Overlays Brand, Apps, Games, ecommerce Daily Impressions: 20m+ Daily Downloads: 1m+ Notifications Brands, Apps, Games, SMB Daily Impressions: 20m+ Daily Downloads: 1m+ 40

41 Proven Track Record JD 360buy.com Ad: Banner Campaign: Q3 User Acquisition Result: Over 200K newly acquired users Order rate: 1%-3% Sword King Ad: Offer Wall Campaign: August 13 User Acquisition Result: Over new register users Conversion: 1.23% New User ARPU: RMB 9.3 Time Hunter Ad: Offer Wall Campaign: 2H September 13 User Acquisition Result: Over 8632 new register users Conversion: 1.10% New User ARPU: RMB 8.4 Mercedes Benz Ad: Banner, Interstitials Campaign: 2H September 13 Impressions: Over 9.4M Clicks: Over 150k 41

42 Emerging Products NQ Live Business Model 1. Premium content 2. Direct traffic monetization 3. Platform licensing 4. Advertising 42

43 Emerging Products Music Radar n The world s leading music search technology, currently providing over 7M music searches DAILY (4/12/14 earnings conference call). n Music Radar" is a music search technology that enables search for music through ambient sound or direct playback recognition. It is the first of its kind that allows users to find the track being played not only from a direct recording, but also by allowing a person to sing & hum the tune. n Search song by: Direct music playback (ambient or direct playback) Singing/humming n World s BEST: Proven and tested as the world s best melody recognition engine Extremely fast and efficient recognition. Personalized music recommendations based on user behavior. Enables integration with 3rd party music services. 43

44 Emerging Products Hissage 44

45 Enterprise Mobility - NationSky n Leader in China enterprise mobility services Over 1,250 large and medium enterprise customers n Strong industry alliances and partnerships Apple, RIM, China Mobile, Mobile Iron, GEMA etc. n Cross platform proprietary expertise and IP in mobile enterprise services and software Solutions for ios, Android, BlackBerry Mobile device/application management Enterprise app/content distribution 45

46 Enterprise Mobility - NQ Sky Enterprise Mobility Management Needs NQ Sky Enterprise Mobility Management Platform (EMM) Enterprise Analytics Secure Enterprise Messaging 3. Content (Documents, s, Messaging) Mobile Content Mgmt. (MCM) Mobile Mgmt. (MEM) 2. Apps (Enterprise Apps, 3 rd Party Apps) 1. Device (Settings, Config., Security, Inventory) Mobile Application Mgmt. (MAM) Mobile Device Mgmt. (MDM) Mobile Security Mgmt. (MSM) ios, Android, Windows 8 46

47 Enterprise Mobility - NQ Sky On Device 47

48 Enterprise Mobility - NQ Sky Management Console 48

49 Enterprise Customer Example 1: Anbang Insurance n Customer Profile: Anbang Insurance Group Inc. is a leading insurance company in China, providing property insurance, life insurance, health insurance, asset management, insurance sales agents and insurance brokers. n All Anbang sales representatives are part of the business development process. NQ Sky MDM is used for asset management, data security management, mobile app updates and push, and IT policy management. n Competition: Mobile Iron and AirWatch n Key Criteria: Highest technical score on proofof-concept n Deployed Seats: 5,000 n Total Seats: 15,000 49

50 Enterprise Customer Example 2: Hai Di Lao n Customer Profile: 80 franchised restaurants in China. Every restaurants utilizes over 100 tablets for diner menu display and customer orders. NQ Sky MDM is implemented to manage all tablets including, device provisioning, tablet configuration and management, security management, application provisioning, asset management. n Competition: Neusoft, Huawei, Mobile Iron n Key Criteria: Feature set and performance n Deployed Seats: 5,200 n Total Seats: 10,000 50