Investor Presentation
October 2016
Safe Harbor SlideSafe Harbor Statement
This presentation contains forward-looking statements that involve risks and uncertainties, including statements regarding MobileIron's revenue and other GAAP and non-GAAP financial metrics for the company's third quarter in 2015 and other statements regarding trends in the company's business, including statements regarding MobileIron's GAAP and non-GAAP revenue and operating expense targets, growth in our customer base, increased customer adoption, and expected benefits from new product offerings and MobileIron’s partner ecosystem. There are a significant number of factors that could cause actual results to differ materially from statements made in this presentation, including MobileIron's limited operating history,quarterly fluctuations in MobileIron's operating results, MobileIron's need to develop new solutions and enhancements to compete in rapidly evolving markets, product defects, competitive pressures, customer adoption, changes by operating system providers and mobile device manufacturers, MobileIron's inability to manage growth, the quality of MobileIron support, MobileIron's reliance on channel partners and development of partner ecosystem.
Additional information on potential factors that could affect MobileIron's financial results is included in the company's SECfilings, including its most recent Form 10-K and Form 10-Q. MobileIron does not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.
VisionUnlock human
potential
MissionProvide security and apps
backbone for modern computing
StrategyBuild scalable, multi-OS
architecture with repeatable business model
Large Secular Trend of Enterprise Security & Mobility
Leadership Positionin the Magic Quadrant
Rapidly Growing Base with over 10+ million Cumulative seats and 12,500 Cumulative Customers since 2009
High Organic GrowthRecurring Revenue Growth >20% YoY
Sales Leverage & Reach through Global Channels
Strong ecosystem100+ OS, device, security, cloud, network, apps ISVs
Accelerating Business Modelwith Compelling Economics & Path to Profitability
Data as of fourth quarter 2015
Enablement
Mobile security Cloud security
Network security
Intelligence
1
Move to mobile
2
Move to cloud
Two trends power our business
Old: Perimeter Model
Enterprise Boundary Collapsing
System imageAnti-malware agents
PerimeterFirewall
Device VPNVDI
Mobile & Cloud Model
Salesforce Office365 Workday SAP Oracle
Concur Google Drive box Dropbox
Enterprise information is everywhere:
In the datacenter
In the cloud
In mobileapps
On mobile devices
In motion between them
Apps@WorkEnterprise app store
Docs@WorkSecure content
Web@WorkSecure browsing
Help@WorkTroubleshooting
TunnelPer app VPN
Email+Secure email
Note: Some features will vary by device and deployment model
AppConnectEcosystem
Conditional Access Integration
Policy and Identity Cloud SecurityEnablement Enforcement
MobileIron end-to-end product architecture
OS / ODM
Device adoption
Service providers
Services multiplier
Security
App
licat
ions
Mobile-awareness
Infrastructure
Broad, integrated ecosystem
California lawEMM recommended to meet legislated
cyber-security standard
Regulatory tailwind
Common criteria1st to be certifiedDISA standard
Federal tailwind
Windows 10Platform tailwind
New productsInnovation tailwind
MobileIron AccessMobileIron Rooms
Significant business tailwinds
Why we win
We secure apps
AppConnect
We secure the network
Sentry
We secure identity
Certs and SSO
Routes to market
Operators
VARs
Financial Overview
Sales Model: Optimized for Long Term Growth
SELL MORE SEATS
INC
REA
SE $
/SEA
T
1) Renew: renewals of subscription and software support agreements on a device basis
Upsell More ProductsIncreased $ per seat
Land New CustomersSubscription or Perpetual
Expand OrdersExisting Customer Upside
RenewHigh Renewal Rate
MCM MAM
MDM
Kerberos
Solid Top-Line Growth
Non-GAAP Revenue(excludes VSOE)
Gross Billings
22% CAGR1Q13-3Q16
24% CAGR1Q13-3Q16
$18M $19M$22M
$25M$27M
$30M
$34M$37M
$33M$34M
$38M
$43M
$38M$39M
$42M
$44-46M
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
3Q15
4Q15
1Q16
2Q16
3Q16
4Q16
$23M$20M
$26M
$32M $30M
$35M$38M
$42M
$36M$39M
$41M
$49M
$38M$42M
$47M
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
3Q15
4Q15
1Q16
2Q16
3Q16
4Q16
$52-54M
Revenue Mix Shifting Towards Subscription
See earnings press release for non-GAAP reconciliation
Shift from Perpetual to Subscription64% to 25%
Net Present Value on Subscription
Higher
Increased Predictability
$9M $9M
$12M
$16M$16M
$19M$20M
$24M$24M$25M
$27M
$31M
$27M
$31M
$35M
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
3Q15
4Q15
1Q16
2Q16
3Q16
Recurring Billings and Revenue
Recurring Billings Recurring Revenue
Billings Model
Perpetual (One Time)
Software Support
Term Subscription(12/24/36 Month)
Monthly Recurring (MRC)Billed Each Month by Service Provider
Not in Deferred Revenue
Footnotes:1) See earnings press release for non-GAAP reconciliation2) Recurring billings: Billings from subscription (term and MRC) plus service support. 3) Recurring revenue: revenue from subscription (term and MRC) plus service support.
44% CAGR51% CAGR
$6M$7M
$9M
$11M$12M
$14M$16M
$18M$20M
$22M$23M
$26M$27M
$28M$29M
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
3Q15
4Q15
1Q16
2Q16
3Q16
Operating model summary
Non-GAAP FY2015 3Q 2016 4Q16 Target
Gross Margin 83% 84% 85% – 87%
Sales & Marketing 65% 52% 33% - 36%
Research & Development 35% 33% 18% – 20%
General & Admin 20%* 12% 7% - 9%
Operating Income (47%) (13%) (8%)-(10%)CFO+ 20% - 25%
Percentages are stated as percentages of total revenue. The percentages in the far right column do not represent projections or guidance for a period, but rather long-term objectives that management utilizes as goals in managing the business. Results for a particular period will reflect the impact of the business cycle and varying other factors. See earnings press release for Non-GAAP reconciliation.
* Litigation ($10M)
MobileIron Confidential
Quarterly GAAP to Non-GAAP Reconciliations
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GAAP to Non-GAAP Reconciliation(inUSD$000s,exceptforpercentages) Q1FY2015 Q2FY2015 Q3FY2015 Q4FY2015 FY2015 Q1FY2016 Q2FY2016 Q3FY2016
GAAPRevenue 33,494 34,757 38,001 43,047 149,299 38,008 38,881 41,566
VSOErevenuepriorto2013 (771) (616) (326) (129) (1,842) - - -
Non-GAAPRevenue 32,724 34,141 37,675 42,918 147,457 38,008 38,881 41,566
GAAPGrossProfit 27,000 28,187 30,428 35,506 121,122 30,738 30,764 33,757
VSOErevenuepriorto2013 (771) (616) (326) (129) (1,842) - - -
Amortizationofintangibles 223 223 223 200 871 154 154 154
Stockbasedcompensationcharges 430 443 1,056 845 2,774 390 1,055 747
Restructuringcharge - - - - - - - 181
Non-GAAPGrossProfit 26,883 28,237 31,381 36,423 122,925 31,282 31,974 34,839
Non-GAAPgrossmargin(non-GAAPgrossprofitovernon-GAAPrevenue)
82.2% 82.7% 83.3% 84.9% 83.4% 82.3% 82.2% 83.8%
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GAAP to Non-GAAP Reconciliation – continued
MobileIron Confidential
(inUSD$000s,exceptforpercentages) Q1FY2015 Q2FY2015 Q3FY2015 Q4FY2015 FY2015 Q1FY2016 Q2FY2016 Q3FY2016
Research&development-GAAP 13,501 14,899 17,277 16,504 62,181 16,927 18,019 16,587Stockbasedcompensationcharges (1,728) (2,149) (3,832) (2,898) (10,608) (2,601) (3,812) (2,709)
Restructuringcharge - - (309) - (309) - - (349)
Research&development-non-GAAP 11,773 12,749 13,136 13,605 51,264 14,326 14,207 13,529Research&development-non-GAAP;as%ageofnon-GAAPrevenue
36% 37% 35% 32% 35% 38% 37% 33%
Sales&marketing-GAAP 25,805 29,037 26,442 24,822 106,106 25,669 27,246 24,404Stockbasedcompensationcharges (1,834) (2,193) (2,586) (2,894) (9,508) (3,119) (2,992) (2,307)
Restructuringcharge - - (587) - (587) - - (404)
Sales&marketing-non-GAAP 23,971 26,844 23,270 21,927 96,012 22,550 24,254 21,693Sales&marketing-non-GAAP;as%ageofnon-GAAPrevenue
73% 79% 62% 51% 65% 59% 62% 52%
General&administrative-GAAP 8,398 9,105 10,623 8,065 36,190 7,548 8,265 7,080Stockbasedcompensationcharges (1,143) (1,167) (1,812) (1,780) (5,902) (2,139) (2,686) (2,109)
Restructuringcharge - - (154) - (154) - - (119)
General&administrative-non-GAAP 7,255 7,938 8,656 6,285 30,134 5,409 5,580 4,852General&administrative-non-GAAP;as%ageofnon-GAAPrevenue
22% 23% 23% 15% 20% 14% 14% 12%
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GAAP to Non-GAAP Reconciliation – continued(inUSD$000s,exceptforpercentages) Q1FY2015 Q2FY2015 Q3FY2015 Q4FY2015 FY2015 Q1FY2016 Q2FY2016 Q3FY2016
Operatingloss-GAAP (20,704) (24,853) (23,914) (13,884) (83,355) (19,407) (22,765) (14,314)
VSOErevenuepriorto2013 (771) (616) (326) (129) (1,842) - - -
Amortizationofintangibles 223 223 223 200 871 154 154 154
Stockbasedcompensationcharges 5,135 5,952 9,286 8,418 28,791 8,248 10,545 7,872
Restructuringcharge - - 1,050 - 1,050 - - 1,052
Operatingloss-non-GAAP (16,116) (19,294) (13,680) (5,395) (54,485) (11,004) (12,066) (5,235)
OperatingMargin-non-GAAP;(non-GAAPoperatinglossovernon-GAAPrevenue)
(49%) (57%) (36%) (13%) (37%) (29%) (31%) (13%)
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GAAP to Non-GAAP ReconciliationExplanation of Non-GAAP Measures
To supplement our financial results presented on a GAAP basis, we use the non-GAAP measures indicated in the tables, which exclude stock-based compensation, the amortization of intangible assets, and perpetual revenue recognized from licenses delivered prior to 2013, that we believe are helpful in understanding our past financial performance and our future results. Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Our management regularly uses our supplemental non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Compensation of our executives is based in part on the performance of our business based on these non-GAAP measures. Our non-GAAP financial measures reflect adjustments based on the following items:
Perpetual license revenue recognized from licenses delivered prior to 2013 We have excluded the effect of perpetual license revenue recognized from licenses delivered prior to 2013 from revenue gross profit, gross margin, operating loss, and operating margin. Because we had not established vendor specific objective evidence, or VSOE, of fair value of software support and services prior to January 1, 2013, we recognized perpetual license revenue ratably over the term of the related software support agreement. Upon establishing VSOE on January 1, 2013, we began to recognize perpetual license revenue upon delivery assuming all other revenue recognition criteria are met. As a result, our perpetual license revenue includes amounts related to licenses delivered in previous years. Revenue from these perpetual licenses delivered prior to 2013 has declined over each quarter since the quarter ended March 31, 2013 and will continue to decline sequentially until it is fully amortized. We evaluate our business performance excluding revenue from these perpetual licenses delivered prior to 2013 as we believe that the inclusion of this revenue makes it difficult to compare periods and understand growth in our business.
Stock-based compensation expenses: We have excluded the effect of stock-based compensation expenses from our non-GAAP cost of revenue, operating expenses and net income measures. Although stock-based compensation is a key incentive offered to our employees, and we believe such compensation contributed to the revenues earned during the periods presented and also believe it will contribute to the generation of future period revenues, we continue to evaluate our business performance excluding stock-based compensation expenses. Stock-based compensation expenses will recur in future periods.
Amortization of intangible assets: We have excluded the effect of amortization of intangible assets from our non-GAAP cost of revenue, operating expenses and netincome measures. Amortization of intangible assets is inconsistent in amount and frequency and is significantly affected by the timing and size of our acquisitions. Investors should note that the use of intangible assets contributed to our revenues earned during the periods presented and will contribute to our future period revenues as well. Amortization of intangible assets will recur in future periods.
Restructuring Charges: In our non-GAAP financial measures, we have excluded the effect of the severance and other expenses related to our reduction in workforce. Restructuring charges may recur in the future; however, the timing and amounts are difficult to predict.