safe harbor statement this presentation may contain...
TRANSCRIPT
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Safe Harbor Statement
This presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties, including statements related to anticipated revenues, expenses, earnings, operating cash flows, the outlook for JAMDATs markets and the demand for its products. These risks and uncertainties can affect actual results and could cause actual results to differ materially fromthose expressed or implied in any forward-looking statements made by us, or on our behalf. Please refer to JAMDATs reports and filings with the Securities and Exchange Commission for a further discussion of these risks and uncertainties. We also caution you not to place undue reliance on forward-looking statements, which speak only as of the date they are made. We undertake no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date they were made or to reflect the occurrence of unanticipated events.
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March, 2005
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Overview
Leading global publisher of wireless games
Industry leading revenue AND earnings growth
Unparalleled industry domain expertise
Global distribution on over 90 carriers in 40 countries
Over 200 employees with offices in Los Angeles, Montreal, London, Tokyo and Hyderabad
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Rapidly Growing US Market
$144$345
$590
$900
$1,210
$1,476
2003 2004 2005 2006 2007 2008
Source: IDC, U.S. Wireless Gaming 2004-2008 Forecast and Analysis: GamingTogether, Dec. 2004
JAMDAT
178%
US Wireless Gaming Market (59% CAGR)($ in Millions)
US Marke
t
140%
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$1.99 - Subscription$5.99 - Unlimited
Info
Whats newGet GamesGet TonesGet GoingGet PixGet FunGet Messaging
Get Fun & Games
Purchasing Games
JAMDAT Golf 2005
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Carriers Bill on Our Behalf
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107193
290
413
547
671
2003 2004 2005 2006 2007 2008
Worldwide BREW & Java Handset Sales
(in Millions)
Next Generation Handset Sales
Source: Arc Group, Mobile Entertainment Applications & Markets, Worldwide Market Analysis & Strategic Outlook, 2003-2008, Sept. 2003
44% CAG
R
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Driving Global Transition
BREW & Java
BREW & Java
Mobile Subscriber Source: IDC, Worldwide Mobile Phone 2004-2008 Forecast and Analyst, April 2004 Estimated Penetration of BREW & Java Handsets based on 2.5 year replacement cycle
Estimated Penetration of Next Generation Handsets
2003 20081.3B Wireless Subs 2.0B Wireless Subs
12% 70%
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Our Publishing Strategy
Distribution
Branding
Execution
Innovation & Quality
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Innovation Throughout Platform Evolution
WAP6K Pixel
2001 2002 2003 2004 2005
Handset Capability
BREW / J2ME
16.4K Pixel
Networked Games
19.2K Pixel
ARM9 /Smartphone
38.7K Pixel
3D1.3 MP Video
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Over 100 World Class Properties
Original Sports Licensed
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Long Term Control of Key IP
*Worldwide Scrabble rights controlled through 2007
2001 - 2008
2002 - 2008
2002 - 2008
6 yr. Relationship
7 yr. Relationship
6 yr. Relationship
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5 years spent building carrier relationships
40 Countries90+ Carriers
900+ Million Subscribers
Americas Asia Pacific
Europe
Global Carrier Distribution Channel
http://www.maxis.net.my/index.phphttp://www.starhub.com/http://www.cht.com.tw/CHTFinalE/Web/index.phphttp://www.sfr.com/http://www.kddi.com/english/index.html
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Distribution Complexity
Low
Medium
High
33 Handsets on Verizon
http://www.verizonwireless.com/b2c/store/controller?item=phoneFirst&action=viewPhoneDetail&selectedPhoneId=1586
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Asia Pacific
Repeat Process for Each Carrier
Americas Europe
Over 400 Handsets Worldwide
http://www.wwireless.com/http://images.google.com/imgres?imgurl=http://www.skytec-ag.de/imperia/md/images/references/customers/Logo_T_mobile.gif&imgrefurl=http://www.skytec-ag.de/de/references/customers/index.shtml&h=50&w=100&sz=2&tbnid=x-6RSz9307EJ:&tbnh=38&tbnw=76&start=122&prev=/images%3Fq%3Dt-mobile%2Blogo%26start%3D120%26hl%3Den%26lr%3D%26ie%3DUTF-8%26sa%3DNhttp://www.sfr.com/http://images.google.com/imgres?imgurl=http://www.skytec-ag.de/imperia/md/images/references/customers/Logo_T_mobile.gif&imgrefurl=http://www.skytec-ag.de/de/references/customers/index.shtml&h=50&w=100&sz=2&tbnid=x-6RSz9307EJ:&tbnh=38&tbnw=76&start=122&prev=/images%3Fq%3Dt-mobile%2Blogo%26start%3D120%26hl%3Den%26lr%3D%26ie%3DUTF-8%26sa%3DNhttp://www.vodafone.co.uk/http://www.swisscom.com/GHQ/?lang=enhttp://www.mobilkomaustria.com/CDA/frameset/start_frame/0,3149,888-888-html-de,00.htmlhttp://www.starhub.com/http://www.kddi.com/english/index.htmlhttp://www.cht.com.tw/CHTFinalE/Web/index.phphttp://www.attwireless.com/
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Expanding our Customer Reach
Direct to Consumer
Handset OEM Retail
Carriers
3%
Wireless Revenue Channels FY 2004
97% < 0.5%
http://images.google.com/imgres?imgurl=http://www.retinal.nu/verizon/images/getitnowgames.gif&imgrefurl=http://www.retinal.nu/verizon/&h=56&w=110&sz=1&tbnid=ZkeNYU0ZehgJ:&tbnh=40&tbnw=78&start=22&prev=/images%3Fq%3Dget%2Bit%2Bnow%2Bverizon%26start%3D20%26hl%3Den%26lr%3D%26sa%3DNhttp://www.circuitcity.com/sony.htmlhttp://www.ebgames.com/
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Radio ShackRadio Shack
Radio Shack JAMDAT is Radio Shacks master merchandiser for
wireless content through the JAMDAT Games To Go!smretail distribution system
Why? Radio Shack is the #1 Retailer of wireless
phones in the US - over 7,000 stores
Radio Shack wants to sell wireless accessories and content
JAMDAT wants to reach consumers at the point of handset purchase
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Financial Highlights
Committed to Profitable GrowthProfitable in each quarter of 2004$5.1M Adjusted net income on $36.6M of revenue (14% margin)$6.6M EBITDA (18% margin)
Strong Balance Sheet$75M of Cash and Receivables at 12/31/2004 $3.62 per share (20.7M @ 12/31/2004)
Pure play wireless gaming growth story
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$1.8 $2.3$4.1
$5.2$7.0
$8.4$9.5
$11.6
$14.1
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1E
Consistent Sequential Revenue Growth($ in millions)
Pure Play Growth Story
22%
13%
20%
22%
2003 2004 2005
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$1.6
$6.9
$13.5 $14.5
$36.6
$25.3
FY 2002 FY 2003 FY 2004
Revenue Operating Expenses(1) Excludes non-cash stock compensation expense
(1)
Increasing Revenues Faster than Expenses
Revenues up 2,188% - Expenses up 267%($ in Millions)
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Revenue Diversification
14%
13%38%
17%3%
15%
$36.6 Million
Increasing revenues, up 171% , AND reducing Channel and Product concentration
Verizon
IntlOther US
PC/PDA
Sprint
Cingular
FY 2004
Bowling Franchise
21%
100+ Products
Channel Products
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0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2003 2004
Amortizationof Intangibles
Hosting &Other
LicenseAmortization
Royalties
Gross Margin
Cost of Revenues
85% 81% Gross Margin
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Quarterly Fluctuations
% of Revenue
R&D, 35%
G&A, 19%S&M, 16%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
20042003
What happened in 2004 Increased workforce from
100 to over 200
Became a Public Company
Expanded into Japan and India
Continued to invest heavily in product development (all expensed) .
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Product Revenue by Year
FY 2002 FY 2003 FY 2004$0.0
$10.0
$20.0
$30.0
$40.0
2002 2003 2004
Year Product Launched
($ in Millions)
55%
12%
33%
Long product shelf-life
Catalog generated 85% of 2003 revenues and 88% of 2004 revenues
High R&D investment over the past 4 years creates strong revenue momentum 85%
88%
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$11.6$14.1
Q4 '04 Q1 '05E
$0.06
$0.12
Q4 '04 Q1 '05E
Revenue Growth & Profitability
(1) Excludes Non-cash Stock Compensation and Amortization of Other IntangiblesAll 2005 numbers based on midpoint of guided range
Revenue($ in Millions)
(1)
$36.6
$61.0
FY 2004 FY 2005E
Adjusted EPS
$0.24
$0.53
FY 2004 FY 2005E
Year
Qtr22%
67%
100%
121%
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Lock-up Shareholders
Apax Partners 3.7M
JAMDAT Employees 3.0M
Benchmark Capital 2.5M
Qualcomm 2.3M
Sprint 0.7M
Intel 0.6M
Sun 0.2M
http://www.benchmark.com/index.htmlhttp://www.jamdat.com/JamdatWeb/Catalog/US/en/game/mobile/Welcome;jsessionid=KALDHGCLMCEI
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Research Coverage
Current CoverageLehman Brothers Jeff Kvaal / Tim Luke Overweight - $25.00
Wireless Equipment
ThinkEquity Mark Argento Buy - $25.00New Media
Kaufman Brothers Mark May Buy - $24.00 Internet & Digital Media
UBS Michael Wallace Neutral - $23.00 Consumer Electronics
Merriman Curhan Kevin Dede Buy - mid-$20sWireless Technology
Safe Harbor StatementOverviewRapidly Growing US MarketCarriers Bill on Our BehalfNext Generation Handset SalesDriving Global TransitionOur Publishing StrategyOver 100 World Class PropertiesLong Term Control of Key IPDistribution ComplexityRepeat Process for Each CarrierExpanding our Customer ReachRadio ShackFinancial HighlightsPure Play Growth StoryIncreasing Revenues Faster than ExpensesRevenue DiversificationGross MarginQuarterly Fluctuations Product Revenue by YearRevenue Growth & ProfitabilityResearch Coverage