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November 2016 RADCOM Ltd (RDCM) – Corporate Overview

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  • November 2016

    RADCOM Ltd (RDCM) – Corporate Overview

  • Safe Harbor Provision

    Certain statements herein contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act and Section 21E of the Exchange Act. These forward-looking statements include, but are not limited to, those statements regarding expected revenues, being well positioned to capitalize on industry tailwinds and our NFV win, the market potential for NFV, expanding our direct presence in North America, Europe and Asia, investing in direct sales, our capital position, growth objectives and statements concerning assumptions made or expectations as to any future events, conditions, performance or other matters. In some cases, forward-looking statements are identified by terminology such as "may," "will," "could," "should," "expects," "plans," "anticipates," "believes," "intends," "estimates," "predicts," "potential," "opportunity" or "continue" or the negative of these terms or other comparable terminology. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or performance to differ materially from those projected. These statements are only current predictions and are subject to known and unknown risks, uncertainties, and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from those anticipated by the forward-looking statements. In addition, past financial or operating performance is not necessarily a reliable indicator of future performance and you should not use our historical performance to anticipate results or future period trends. The forward-looking statements contained herein are subject to risks and uncertainties, including those described herein under "Risk Factors" and in our most recent Annual Report on Form 20-F, under Item 3.D. - "Risk Factors" and in our other filings with the SEC. You are cautioned not to place undue reliance on these forward looking statements, which speak only as of the date on which that statement is made. We cannot guarantee future results, levels of activity, performance, achievements or that any of the events anticipated by the forward-looking statements will occur or, if any of them do, what impact they will have on our results of operations and financial condition. Except as otherwise required by law, we are under no obligation to (and expressly disclaim any such obligation to) update or revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, after the date hereof.

    In this presentation, management will be referring to certain non-GAAP financial measures, which are provided to enhance overall understanding of the company’s financial performance. By excluding certain non-cash charges, non-GAAP results provide information that is useful in assessing RADCOM's core operating performance, and in evaluating and comparing our results of operations on a consistent basis from period to period. The presentation of this additional information is not meant to be considered a substitute for the corresponding financial measures prepared in accordance with generally accepted accounting principles. Investors are encouraged to review the reconciliations of GAAP to non-GAAP financial measures which are included in the “Appendix” section.

  • Company Overview

    Leading software-based solutions for service assurance and customer experience management

    First to market with software-based and network function virtualization (NFV) probes

    Groundbreaking NFV win with AT&T

    Enables migration to NFV while supporting both traditional and next-generation networks

    Exceptional performance with terabit scalability for mobile and fixed networks

    $28 - $29.5 million revenue guidance for 2016, representing 50% to 58% growth over 2015

    Founded in 1991 and publicly traded since 1997

    Headquartered in Tel Aviv, Israel

    The MaveriQ Solution Overview

    Benefits and Use Cases

    Mission-critical network and service visibility

    Improve subscriber quality of experience

    Reduce customer churn

    Pro-actively identify and resolve network issues

    Accelerate deployment of new services and migration to NFV

    Increase operational efficiency and lower costs

    Software-Based Highly Scalable Traditional, NFV and Hybrid

    Suite of integrated applications

    Unified dashboard with visibility across networks and subscribers

    Service Assurance Customer Experience Management

    2

  • >$1 Billion Market Opportunity for Probe Solutions RADCOM delivers software-based probe solutions for service assurance and customer experience management

    Key Market Drivers

    Data acquisition

    and big data analytics

    Customer experience

    management

    Revenue uplift from reduced

    customer churn

    Rapid increase in

    mobile data

    LTE, VoLTE, IoT, M2M, and

    LTE-A

    Increase operational

    efficiency and lower costs

    Market Challenges for Probe Solutions

    Alternative probe solutions historically based on purpose-built hardware

    Physical probes costly to deploy and maintain

    Proprietary ASIC designs slow to develop

    Difficult to scale for next-generation services

    No migration path for NFV networks

    RADCOM Solution

    Software-based solution running on standard hardware

    Easy to deploy and manage

    Accelerates software product design lifecycle

    Highly scalable for next-generation services

    Enables migration to NFV while supporting traditional networks

    3

  • Global NFV and SDN Market ($ in billions)

    $0.3

    $1.7

    $2.3

    $3.3

    $5.2

    $6.9

    $8.3

    2013 2014 2015 2016P 2017P 2018P 2019P

    Source: Software Defined Networking and Network Function Virtualization market, Gartner (March 2016).

    Benefits of Software and Virtualization

    Accelerate time to market for new services

    Increase agility and flexibility for network design

    Increase scalability and lower operating costs through NFV automation

    Reduce CapEx by replacing proprietary hardware with commodity hardware

  • CSPs Need Software-Based Solutions To Transition to NFV RADCOM has been a first mover in offering software-based and NFV solutions for service assurance

    Virtualized software appliances

    High volume standard servers, storage and switches

    Virtual Probes

    NFV and Hybrid Networks

    Legacy traditional network (Hybrid)

    Traditional Network

    DPI

    Router

    Probe Probe

    Probe

    Probe

    Firewall

    BRAS

    SGSN/GGSN

    SBC

    Large CSPs Evaluating / Deploying NFV

    5

    Despite the clear benefits NFV creates new complexity for service assurance

    Large CSPs first to deploy NFV and many will operate hybrid networks

    Most probes solutions do not support NFV and hybrid networks

    Fragmented, purpose-built hardware appliances with hardware and/or software-based probes

  • AT&T Selected RADCOM for its NFV Solution

    RADCOM’s transformational win with AT&T

    RADCOM announced the selection of its MaveriQ solution for deployment by a AT&T in January 2016

    The $18 million initial order was within the framework of a multi-year sales agreement for a virtual-probe-based monitoring solution for AT&T's mobile network

    Result of nine-months of intensive trials during which RADCOM’s virtual probe solution was selected over competitors' offerings by receiving 100% test score

    Recognition by one of the industry's leading CSPs positions RADCOM as the leader for NFV probe-based monitoring solutions

    Strong confirmation of RADCOM's multi-year strategy for its transformation to software-based solutions

    6

  • Packet Switch Core

    E-UTRAN Evolved Packet Core

    (EPC)

    MaveriQ enables CSPs to Accelerate Migration to NFV Highly scalable, software-based solution supporting traditional, hybrid and NFV networks

    Future Proof for NFV Migration Visibility Across 3G, LTE and IMS Networks

    Interfaces Monitored by MaveriQ

    PCRF

    SGSN GGSN

    MME MME

    Serving Gateway PDN GW

    Internet

    PSTN

    IP Multimedia Subsystem (IMS)

    eNB

    AS HSS

    P-CSCF S-CSCF

    BGCF

    UTRAN

    eNB

    OCS HSS

    Virtual EPC

    Virtual IMS

    Virtualized Network Functions (VNFs)

    NFV Infrastructure (NFVI)

    NFV Management and Orchestration

    Orchestrator

    VNF Manager

    Virtualization Layer

    Virtual Computing

    Virtual Network

    Virtualized Infrastructure

    Managers

    Virtual Storage

    …they will need to upgrade or replace their service assurance and probe solutions

    As CSPs migrate all or parts of their networks to NFV…

    7

  • The MaveriQ Solution for Service Assurance and Customer Experience Management Software-based solution for 3G, LTE, VoLTE and NFV networks

    Highlights

    Manages next-generation mobile and fixed networks, including LTE, VoLTE, IMS, VoIP, UMTS/GSM and mobile broadband

    Multi-technology solution monitors multiple networks and services simultaneously

    Highly scalable, carrier grade architecture supporting terabit networks

    Best processing capacity / footprint ratio in the industry

    Suite of pre-integrated software applications

    Advanced real-time visibility for big data analytics

    Cost-effective solution for any network size

    Customer Care

    Quality of Experience

    Performance Analysis

    SLA Management

    KPI Alarms Network Monitoring

    Roaming QoS

    Inter-connection Quality

    Analytics

    MaveriQ Subscriber Dashboard

    Software-Based Highly Scalable Traditional, NFV and Hybrid

    Suite of Integrated Applications

    Unified dashboards with visibility across networks and subscribers

    Service Assurance Customer Experience Management

    8

  • Solution Deployed in Many Leading Tier 1 CSPs

    50 Customers in 25 Countries

  • Generating Growth and Go-to-Market Strategy RADCOM is expanding its presence in North America and Europe. Continue to focus on Asia Pacific & Latin America

    Developing and Expanding Strategic Partnerships

    RADCOM has partnered with solution integrators, such as Amdocs and HP, as well as technology partners, such as Intel, to

    unlock further opportunities in the sales channel

    Network Cloud Ecosystem OpenNFV Program

    Asia Pacific Direct Sales

    Latin America Direct Sales

    North America Direct Sales and Partnerships

    Europe Direct Sales and Partnerships

    Network Builders Program

    Expand presence in North America and Europe

    Invest in direct salesforce and technical support to drive future large wins and scale deployments

    10

    CloudBand

  • Financial Highlights

    • 3Q Earnings Highlights:

    • Revenues of $7.7M, 62% YoY growth

    • Reiterated our full-year revenue guidance range of $28-$29.5M; Representing 50% to 58% growth over 2015

    • Strong Balance sheet:

    • As of September 30, 2016, the Company had cash and cash equivalents of $43.2 million and no debt