Entropic Communications

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Transcription:

Entropic Communications

Safe Harbor Statement Forward Looking Statements These slides and the accompanying oral presentation contain forward-looking statements and information. The use of words such as may, might, will, should, expect, plan, anticipate, believe, estimate, project, intend, future, potential or continue, and other similar expressions are intended to identify forward looking statements. All of these forward-looking statements are based on estimates and assumptions by our management that, although we believe to be reasonable, are inherently uncertain. Forward-looking statements involve risks and uncertainties, including, but not limited to, economic, competitive, governmental and technological factors outside of our control, that may cause our business, industry, strategy or actual results to differ materially from the forward-looking statements. These risks and uncertainties may include those discussed under the heading Risk Factors in the Company s most recent registration statement on Form S-1 on file with the Securities and Exchange Commission, and other factors which may not be known to us. Any forward-looking statement speaks only as of its date. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law. Regulation G Reconciliation During the course of this presentation, we may refer to historical and forward-looking non-gaap financial measures. A reconciliation of historical non-gaap financial measures with the most directly comparable GAAP financial measures can be found on our web site at www.entropic.com in the Investor Relations section. We have not provided a reconciliation of forward-looking non-gaap financial measures due to the difficulty in forecasting and quantifying the amounts that would be required to be included in the comparable GAAP measure that are dependent upon future market conditions and valuations.

David Lyle Chief Financial Officer

Home Entertainment Market Dynamics Network-Enabled Devices (units in Millions) Digital Satellite Households (units in Millions) 302 634 261 407 2007 2012 2007 2012 Si Tuners+HDMI Devices (units in Millions) Cable & FTTx BB Subscribers (units in Millions) 352 1086 104 194 2007 2012 2007 2012 Source: Multimedia Intelligence, IMS Research, The Linley Group, In-Stat, Infonetics and Company Estimates

Connected Home Entertainment Market Size $2.9B $1.2B $1.2B $300M Source: Multimedia Intelligence, IMS Research, The Linley Group, In-Stat, Infonetics and Company Estimates

MoCA Case Study: Verizon FiOS Deployment Telco Tellabs ONT Office / Den Kid s Bedroom Motorola Master Bedroom Motorola FTTP Coax Motorola HD DVR Actiontec BHR Family Room Kitchen

MoCA Case Study: Verizon FiOS Deployment 6 chips per average FiOS TV home 3 chips per FiOS Internet home (1 ONT + 2 BHR) 3 chips per FiOS TV home (1 DVR + 2 ) Telco Tellabs ONT Office / Den Kid s Bedroom Motorola Master Bedroom Motorola Motorola Coax FTTP Motorola HD DVR Family Room Actiontec BHR Kitchen 1.4M FiOS TV Subs 9.6M FiOS TV Homes Passed 2M FiOS Internet Subs 11M FiOS Internet Homes Passed 18M Targeted Homes Passed

US MoCA Opportunity 100+M US Pay TV HH Current Q1 08 Pay TV Subs 16.9M 8.7M 24.7M 13.3M 5.4M 17.0M 13.8M 1.4M Other Opportunity Retail Aftermarket Potential Service Provider: Increases ARPU Reduces SAC Consumer: Anytime, Anywhere access to all home entertainment content Killer Application: Multi-room DVR 56M DVR Homes (2011) X 4 Chipsets per home 224M Total Unit Opportunity Other Applications: Over-the-top video, On-line gaming, PC-TV Content Sharing, WiFi Backbone Source: Rider Research, Yankee Group

Entropic DBS ODU Solutions Office / Den Kid s Bedroom Master Bedroom Office / Den Kid s Bedroom Master Bedroom Cable, Telco DVR DVR Cable, Telco DVR DVR DVR DVR Family Room Kitchen Family Room Kitchen CSS Single Cable Solutions Significantly Reduce The Deployment Cost For DBS Providers

DBS Outdoor Unit: CSS Potential # of installs Per Year 1.6M 1.9M Tier 3 Tier 2 Service Provider: Lowers SAC Reduces Install Time Consumer: Improves Aesthetics Reduces Install Time 17M installs per year 3.5M 5.8M Key Driver: HDTV & DVR Adoption 4.3M 17M Annual Installs (2012) x 2 Entropic chips per install Current Opportunity 34M Annual Chip opportunity Source: Company Estimates

Connected Entertainment Building Blocks Silicon TV Tuners HDMI Solutions Broadband Access Complimentary technologies Strategic building blocks Long term revenue growth Diversification DBS Outdoor Unit Solutions MoCA Home Networking

Revenue Scale and Momentum Quarterly Revenues Annual Revenues in Millions $42.0 $42.8 in Millions $137.6 $40.2 $36.1 $32.0 $29.2 $25.5 $67.7 $19.3 $11.1 $11.8 $2.8 $3.8 $4.8 $6.8 $5.7 $18.2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 '04 '05 '06 '07 05 06 07 08 Note: Revenues reflect the combined revenues of Entropic and RF Magic

Operating Model (1) 2007 Q2 08 LT Model Revenue (in Millions) $137.6 $42.8 Gross Margins 44.6% 48.1% 50% - 52% Research & Development 28% 31% 20% - 22% Selling, General & Admin 15% 15% 9% - 11% Operating Margin 2% 2% 18% - 20% (1) Consists of non-gaap financial measures involving (a) combined statement of operations data for Entropic and RF Magic and (b) exclusion of restructuring costs, amortization of inventory step-up costs, developed technology, purchased intangibles and write-off of in-process R&D as well as stock based compensation expenses and loss on fair value of preferred stock warrant liabilities. See Appendix A for reconciliation of non-gaap financial measures.

Growth Drivers Historical Forecast Access & Tuners MoCA Service Provider MoCA Service Provider MoCA Service Provider MoCA Service Provider MoCA Service Provider 1H 08 2H 08 1H 09 2H 09

ENTR