Parts of TD Sec Report from Today....most covered in FP Upcoming Catalysts:
Large Customer Deals. Redknee has discussed opportunities worth $50 million–$100 million in the
pipeline and on the Q2 call said it expects to close something either in the September or December
quarter. This could be a significant upgrade of an NSN customer or a new competitive win.
Delivering on Margin Expectations. Street estimates (including our own) reflect EBITDA margins of
17–20% for FY15. Redknee has said that it targets "mid-teens" by the end of year two post the
acquisition (i.e. Q2/15), meaning there is the implied expectation that profitability improvement will
continue. Elements of the margin gains are the replacement of third-party software at NSN with Redknee
solutions, as well as re-pricing maintenance contracts for acquired customers.
M2M (IoT) Announcements. Although Redknee has positioned markets outside of telecom as a 3–5 year
opportunity, we believe that headlines could come sooner, as partners roll out solutions. Timing on this is
vague, but we do not believe that any IoT option value is built into the share price