Device Software Optimization

Transcription

1 Device Software Optimization Investor Relations March 2007

2 Forward Looking Statements These slides contain summary information from Wind River s conference call of March 8, 2007 and Wind River s earnings announcement that was furnished with Wind River s Form 8-K, filed with the Securities and Exchange Commission (SEC) on March 8, These slides may contain forward-looking statements, such as our revenue and adjusted or non- GAAP earnings per share for the first quarter of fiscal year These forward-looking statements are based on certain assumptions and are subject to a number of risks and uncertainties and actual future results may vary materially. You are encouraged to read the risk factors described in the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2006; as well as other SEC reports filed after that Form 10-K, including the Form 8-K that was filed on March 8, 2007 in connection with the Company s March 8, 2007 earnings release. Wind River provides non-gaap free cash, and non-gaap earnings per share as an alternative for understanding the company s operating results. Non-GAAP earnings per share for Q1 fiscal year 2008 excludes stock-based compensation, amortization of restricted stock compensation, amortization of purchased and other intangibles, costs incurred for historical stock option review, restructuring charges (reversals), executive severance costs and tax effects of this non- GAAP adjustments. Non-GAAP data is not in accordance with, or a substitute for GAAP and may be materially different from non-gaap measures used by other companies. Wind River s management refers to these non-gaap measures in making operating decisions because they believe that they provide meaningful information regarding Wind River s operational performance. 2

3 Investment Highlights Market Share & Technology Leader Founded 1981, IPO %+ of commercial market Diverse end-markets Blue chip customers consisting of global 300 electronic manufacturers Worldwide footprint Hundreds of millions deployed devices Emerging Opportunities Seminal shift in device software Only comprehensive commercial Device Software Optimization provider Financial Strength $285 Million Revenue (trailing 4 qtr) $203 million in free cash and growing 3

4 What We Do: Device Software Optimization Wind River enables companies to develop, run, and manage device software faster, better, at lower cost, and more reliably. 4

5 Strong Diverse Customer Base Networking Industrial & Automotive Aerospace & Defense Digital Consumer 31%* 21%* 25%* 23%* Agilent Airvana Alcatel Cisco EMC Ericsson Fujitsu Hitachi Hewlett-Packard Huawei Intel Juniper LG Electronics Lucent Marconi Motorola NEC Nokia Nortel Siemens Tellabs UTStarcom ZTE ABB Agilent Bosch BMW Fanuc GE Hitachi Honeywell Mitsubishi National Instruments Omron Rockwell Automation Roper Industries Samsung Schneider Siemens Sumitomo Electric Tektronix Tokyo Electron Xanavi Yokogawa Alcatel BAE Systems Boeing EADS Eurocopter European Space Agency General Dynamics Harris Honeywell IAI KHI L3 LG Innotek Lockheed Martin Loral Space & Communications NASA NEC Northrop Grumman Raytheon Thales Smiths Aerospace Apple Bang & Olufsen Canon Ericsson Fuji Fujitsu Hewlett-Packard Hitachi Humax Kenwood Konica Minolta Matsushita Motorola Nikon Philips Pioneer Samsung Seiko Epson Sony Thomson Toshiba 5 *For FY 2007

6 Device Software Complexity Forcing Trend from Build to Buy Device Requirements Increased Complexity Converging Technologies Multiple Networks to Connect Competitive Pressure Faster Time-to-Market Lower Development Costs Higher Quality Standardization Choice and Flexibility Partnering New Market Mandate Global Best Practices >400,000 Device Software Developers Worldwide* *Source: VDC 6

7 The Wind River DSO Solution Develop Wind River Workbench & Platforms Run Wind River Platforms Manage Wind River Management Suite Industry-Specific Platforms Open standards leadership Global services and support capability Comprehensive partner ecosystem Integrated Partner Software Standards-Based Middleware Operating System Choice Integrated Partner Hardware Hardware Bring-Up Firmware Driver & BSP Application Development Verification and Manufacturing Deployment Management 7 Wind River Workbench

8 Partnering for Success AdaCore Xilinx Wipro Virtutech Trolltech Toshiba Tilcon Software Ltd. ALT Software AMCC Cavium Emerson Express Datalight IP Infusion IXXAT Network Logic Automation Power GmbH Kontron LVL7 Marvell National Instruments NextHop OpenClovis Telelogic Texas Instruments Solid Information Technology Skelmir Rational Software Renesas Opera More Than 350 Partners: Board Manufacturers, Semiconductors, Tools, Services, and Run-Time Software Technology Leaders 8

9 Standardization with Partners Airvana was looking for an integrated Commercial off-the-shelf solution Partner ecosystem was critical Wind River, RadiSys, Freescale and OpenClovis integrated solution offers the ability to begin application development virtually out of the box Wind River the the standard DSO provider Strategic differentiation was ability to achieve a common development environment across multiple platforms (VxWorks and Linux) Enabling leverage of engineering resources from project to project These COTS products underscore the industry s drive towards hardware and software standardization that will allow infrastructure providers like Airvana to focus its efforts on introducing innovative services to the market in the most timely and cost-effective manner possible. Frank Chen, VP, New Infrastructure Engineering 9

10 Q4 FY 2007 Summary Deferred revenue Balance of $127.0 million Increase of 29% year-over-year Sequential increase of $15.1 million vs Q3 FY07 Reported revenue Reported revenue of $76.1 reflected 8% increase year-over-year Record subscription license revenue of $27.8 million Earnings Per Share Non-GAAP: $0.31 GAAP: $0.01 Cash Flow from Operations GAAP cash flow from operations of $15.3 million $203 million in cash, cash equivalents and investments 10

11 Deferred Revenue Long-Term Short-Term $112.0 $127.0 $98.3 $101.5 $101.7 $ Millions $45.5 $44.5 $58.0 $77.1 $82.8 $80.0 $87.8 Subscription Licenses account for 66% of short-term deferred revenue (as of 1/31/07) 11 Q105 Q205 Q305 Q405 Q106 Q206 Q306 Q406 Q107 Q207 Q307 Q407

12 Revenue Mix $ Millions $48.5 $52.8 $65.0 $61.8 $69-$71* $73.7 $66.7 $59.4 $50.4 $70.5 $67.6 $60.0 $49.6 $76.1 $70.2 $63.2 $55.6 Production License PS and Training Maintenance Project Based License Subscription Q108 Q107 Q106 Q105 Q104 Q207 Q206 Q205 Q204 Q307 Q306 Q305 Q304 Q407 Q406 Q405 Q *Q1FY08 guidance issued on 3/8/07

13 Non-GAAP (diluted) EPS $0.28 $0.31 $0.14 FY05 FY06 FY07 GAAP EPS (diluted) was $0.09, $0.33 and $0.01 in FY05, FY06 and FY07, respectively. 13

14 Increasing Cash Flow From Operations (GAAP) $49.3 $55.2 $Millions $40.4 Q4 Q3 Q2 Q1 14 FY05 FY06 FY07

15 Free Cash Free cash is total cash, cash equivalents and investments less principal due on the convertible subordinated debt. $ Millions $76 $87 $104 $120 $133 $145 $156 $177 $170 $174 $189 $ Q105 Q205 Q305 Q405 Q106 Q206 Q306 Q406 Q107 Q207 Q307 Q407 Q306: Repurchased approximately 409,000 shares of common stock for approximately $5M Q107: Repurchased approximately 350,000 shares of common stock for approximately $4.2M Interpeak acquisition resulted in $17.2M net outflow Q207: Repurchased over 1,100,000 shares of common stock for approximately $9.7M Q407: Paid down balance of outstanding $42.2 million convertible subordinated notes

16 Q1 Fiscal Year 2008 Guidance Revenue to be between $69 million and $71 million. Deferred revenue to exceed $134 million. Non-GAAP earnings per diluted share of $0.00-$0.01. GAAP net loss per diluted share of ($0.06) to ($0.07). 16

17 Building Shareholder Value FY 08: Accelerating Growth Diligent investments Sales force Product roadmap acceleration Leverage partnerships Build on new product momentum VxWorks 6 and Linux platforms up triple digits in FY07 Device Software Management Full spectrum of Real-time solutions Increase DSO standardization deals Reduced risk from transition to subscription license model Focus on improving profitability and operating cash flow 17

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