Mavenir 8-K Mavenir Systems Reports 2014 Second Quarter Financial Results

Exhibit 99.1

Mavenir Systems Reports 2014 Second Quarter Financial Results

• Record quarterly revenue of $33.3 million, an increase of 29% year-over-year;

• Added two Tier 1 operators to our customer list for 4G next-generation solutions;

• Delivered significant 4G next generation capacity expansions as tier one US customers launch VoLTE;

• Expanded Evolved Packet Core portfolio with evolved Package Data Gateway (ePDG) enabling mobility for Voice over Wi-Fi solution;

• Expanded software-based voice and video solution set with client provisioning server to enable Voice over Wi-Fi and Rich Communication Services.

Richardson, TX – July 28, 2014 – Mavenir Systems (NYSE: MVNR) today reported financial results for the second quarter 2014, provided its outlook for the third quarter and updated its outlook for the full year of 2014.

Total revenue for the second quarter of 2014 was $33.3 million, an increase of 29% year-over-year and 16% quarter-over-quarter. GAAP operating loss for the second quarter of 2014 was $(2.2) million, compared with $(0.9) million in the second quarter of 2013 and $(2.2) million in the first quarter of 2014. Non-GAAP operating income, which excludes stock-based compensation, foreign exchange gains or losses, depreciation and amortization, was $0.1 million for the second quarter of 2014, compared to $0.2 million for the second quarter of 2013 and a loss of $(0.2) million for the first quarter of 2014. GAAP net loss for the second quarter of 2014 was $(3.9) million, compared to $(3.6) million in the second quarter of 2013 and $(4.0) million for the first quarter of 2014. Non-GAAP net loss for the second quarter of 2014 was $(1.0) million, compared to $(1.6) million for the second quarter of 2013 and $(1.1) million for the first quarter of 2014.

GAAP gross profit margin was 55% in the quarter, compared to 52% in the second quarter of 2013 and 56% in the first quarter of 2014. Non-GAAP gross profit margin was 57% in the quarter, above the high end of the guidance range provided in our earnings release for the first quarter of 2014, compared to 53% in the second quarter of 2013 and 57% in the first quarter of 2014.

Net loss per share was $(0.16) for the second quarter of 2014 compared with $(2.72) for the second quarter of 2013 and $(0.17) for the first quarter of 2014. As outlined in the accompanying table entitled “Non-GAAP Net Loss Per Share” included in this press release, the non-GAAP net loss per share was $(0.04) for the second quarter of 2014 compared to $(0.09) for the second quarter of 2013 and $(0.05) for the first quarter of 2014.

A description of the non-GAAP calculations and reconciliation to comparable GAAP measures is provided in the accompanying table entitled “Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures.”

“We achieved a number of financial and business milestones again this quarter. The company delivered a strong quarter with strong financial results, again setting a new quarterly revenue record with Gross Margin above the high end of our guidance range,” said Pardeep Kohli, president and chief executive officer, Mavenir Systems. “Mavenir is seeing momentum in our two major areas of focus that are driving mobile network transformation—the adoption of all-IP technology and the build out of next generation networks using software-based solutions. LTE network transformation has begun in key markets with several VoLTE launches and announcements in the second quarter indicating that 2014 is the year of VoLTE.”

Mavenir Second Quarter 2014 Business and Financial Highlights

• Record quarterly revenue of $33.3 million, an increase of 29% year-over-year;

• Added two Tier 1 operators to our customer list for next-generation solutions;

• Expanded end-to-end portfolio of 4G LTE core networking solutions with announcement of evolved Packet Data Gateway;

• Expanded software-based voice and video solution set with client provisioning server to enable Voice over Wi-Fi and Rich Communication Services;

• Received key industry awards for our Network Functions Virtualization (NFV) solution, Voice over LTE Leadership and Innovation and Best RCS.

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Guidance

Mavenir is providing the following third quarter and updated full year 2014 guidance with respect to anticipated total revenue, non-GAAP gross margin, non-GAAP operating loss, non-GAAP net loss and non-GAAP net loss per share.

Third quarter of 2014

• Revenue to range from $31.0 million to $33.0 million, reflecting growth of 19% to 27% over the third quarter of 2013.

• Non-GAAP gross margin to range from 51% to 53%.

• Non-GAAP operating loss to range from $(3.5) million to $(2.5) million.

• Non-GAAP net loss to range from $(4.4) million to $(3.4) million.

• Non-GAAP net loss per share ranging from $(0.16) to $(0.12) (based on a forecasted weighted average number of shares outstanding of 27,350,000).

Full year 2014

• Revenue is increased to a range from $127 million to $130 million, reflecting growth of 25% to 28% year-over-year.

• Non-GAAP gross margin to range from 57% to 59%.

• Non-GAAP operating income is expected to be at approximately a break-even level.

Conference Call

Mavenir will discuss its second quarter 2014 results and its business outlook via teleconference today at 4:00 p.m. Central Time (5:00 p.m. Eastern Time). To access this call, investors can dial the toll free number 1-855-302-8830 (domestic) or 1-330-871-6073 with the ID#64789401, or access a live webcast of the conference call at Mavenir’s websitehttp://investor.mavenir.com.

A replay will be available following the call on Mavenir Systems’ Investor Relations website and for one week at the following numbers: 855-859-2056 (domestic) or 404-537-3406 (international) with ID# 64789401.

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Non-GAAP Financial Measures & Definitions

In addition to disclosing financial results that are determined in accordance with U.S. GAAP, Mavenir discloses non-GAAP operating loss, non-GAAP net loss and non-GAAP net loss per share, which are non-GAAP financial measures, as supplemental measures. Non-GAAP operating loss represents operating loss before depreciation, amortization and stock-based compensation. Non-GAAP net loss represents non-GAAP operating loss after interest and taxes, as adjusted for uncertain tax positions component. Non-GAAP net loss per share represents non-GAAP net loss divided by our adjusted weighted average common shares outstanding, which assumes the conversion of preferred shares as of the beginning of the period. These measures are used by management to evaluate our business and management believes these measures may help investors evaluate the Company’s fundamental operational performance. Management believes these non-GAAP measures facilitate operating performance comparisons from period to period by excluding potential differences caused by variations in capital structures, tax position, depreciation, amortization, stock-based compensation expense and certain other expenses. These measures are not measures of our financial performance under U.S. GAAP and should not be considered in isolation or a substitute for net loss, operating loss or other performance measures as determined in accordance with U.S. GAAP. These measures should be read only in conjunction with our consolidated financial statements prepared in accordance with U.S. GAAP. Please refer to the accompanying tables entitled “Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures” and “Non-GAAP Net Loss Per Share” for a reconciliation of consolidated GAAP operating loss to non-GAAP operating loss, consolidated GAAP net loss to non-GAAP net loss.

In determining our guidance for the second quarter and full year of 2014 set forth in “Guidance,” we have chosen to use non-GAAP measures for all metrics other than revenue. The non-GAAP metrics exclude the effects of depreciation, amortization, foreign exchange gains or losses, and stock-based compensation. The effects of these two items are difficult to forecast in advance as they relate to future foreign exchange rates and future stock prices, which are subject to external factors that are difficult to predict. As a result, Mavenir does not give guidance on GAAP metrics other than revenue.

Forward-Looking Statements

Statements in this press release that are not purely historical facts constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include the statements under “Guidance” above, statements regarding Mavenir’s expectations with respect to revenue, non-GAAP gross margin, non-GAAP operating loss, non-GAAP net loss and non-GAAP net loss per share, as well as statements about transformation of mobile networks by mobile service providers, their transition to all-IP technology and software-based solutions and Mavenir’s views about its ability to deliver solutions that enable this transformation and transition. Forward-looking statements can generally be identified by words such as “anticipates,” “may,” “can,” “believes,” “expects,” “projects,” “intends,” “likely,” “target,” “will,” “to be” and other expressions that are predictions or indicate future events, trends or prospects, although not all forward-looking statements contain these

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identifying words. These forward-looking statements represent management’s current expectations and involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Mavenir to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Accordingly, investors should not place undue reliance on these forward-looking statements.

Factors that could cause actual results to differ materially from those indicated by the forward-looking statements include risks regarding the timing of the adoption of 4G by mobile service providers around the world; mobile service providers’ investment in next-generation communications technology; our ability to sell solutions to mobile service providers, particularly those serving large numbers of customers; the length and variability of the sales cycles for our solutions; actions taken by our competitors; our ability to negotiate acceptable financial terms with our mobile service provider customers; the performance of our solutions when implemented in mobile service provider networks; management’s ability to accurately forecast Mavenir’s financial results; the timing of revenues and the application of complex revenue recognition rules to such revenues; prolonged negative economic conditions in domestic and global markets; and other factors described in our filings with the Securities and Exchange Commission (“the SEC”), including under the caption “Risk Factors” and elsewhere in our annual report on Form 10-K for the year ended December 31, 2013 and in Mavenir’s other SEC filings. There is no assurance that Mavenir’s expectations will be realized. If one or more of these risks or uncertainties materialize, or if Mavenir’s underlying assumptions prove incorrect, actual results may vary materially from those expected, estimated or projected. The statements in this press release are made as of the date of this press release, even though this press release is made available on Mavenir’s website or otherwise. Mavenir does not assume any obligation to update the forward-looking statements provided herein to reflect events that occur or circumstances that exist after the date on which the forward-looking statements were made, except as required by law.

About Mavenir Systems:

Mavenir Systems (NYSE: MVNR) provides software-based networking solutions that enable mobile service providers to deliver next generation services over 4G LTE networks. Mavenir™ has a fully virtualized end to end portfolio of Voice/Video, Messaging and Mobile Core products that include IP Multimedia Subsystem (IMS), Evolved Packet Core (EPC) and Session Border Controller (SBC). Mavenir’s solutions, based on the award-winning mOne^® software platform, leverage NFV and SDN technologies for deployments on cloud-based infrastructure.

www.mavenir.com

^© 2014Mavenir Systems, Inc. All rights reserved.

Mavenir Systems^®, mOne^®, AirMessenger^®, Mavenir™, mStore™, mCloud™, and Transforming Mobile Networks™ are trademarks of Mavenir Systems, Inc.

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Mavenir Systems, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except per share data)

(unaudited)

	Three months ended June 30,								Three months ended March 31,				Six months ended June 30,
	2014				2013				2014				2014				2013
Revenues
Software products		$	27,155			$	19,537			$	23,037			$	50,192			$	37,264
Maintenance			6,132				6,215				5,692				11,824				10,926
			33,287				25,752				28,729				62,016				48,190
Cost of revenues
Software products			11,912				10,763				9,953				21,865				17,414
Maintenance			2,943				1,497				2,744				5,687				2,827
			14,855				12,260				12,697				27,552				20,241
Gross profit			18,432				13,492				16,032				34,464				27,949
			55.4	%			52.4	%			55.8	%			55.6	%			58.0	%
Operating expenses:
Research and development			7,190				5,376				6,133				13,323				11,498
Sales and marketing			8,228				4,615				6,871				15,099				9,656
General and administrative			5,244				4,370				5,250				10,494				9,361
Total operating expenses			20,662				14,361				18,254				38,916				30,515
Operating loss			(2,230	)			(869	)			(2,222	)			(4,452	)			(2,566	)
Other expense (income):
Interest income			(18	)			(3	)			(43	)			(61	)			(8	)
Interest expense			425				665				783				1,208				1,115
Loss on early extinguishment of debt			—				—				1,783				1,783				—
Foreign exchange (gain) loss			849				912				(795	)			54				2,644
Total other expense (income), net			1,256				1,574				1,728				2,984				3,751
Loss before income tax			(3,486	)			(2,443	)			(3,950	)			(7,436	)			(6,317	)
Income tax expense			405				1,198				95				500				1,618
Net loss		$	(3,891	)		$	(3,641	)		$	(4,045	)		$	(7,936	)		$	(7,935	)
Other comprehensive income (loss)
Foreign currency translation adjustments			776				(70	)			(815	)			(39	)			(102	)
Total comprehensive loss		$	(3,115	)		$	(3,711	)		$	(4,860	)		$	(7,975	)		$	(8,037	)
Net loss per common share:
Basic		$	(0.16	)		$	(2.72	)		$	(0.17	)		$	(0.33	)		$	(5.93	)
Diluted		$	(0.16	)		$	(2.72	)		$	(0.17	)		$	(0.33	)		$	(5.93	)

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Mavenir Systems, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands, except share and per share amounts)

(unaudited)

	June 30, 2014				December 31, 2013
					(as adjusted)
Assets:
Current assets:
Cash and cash equivalents		$	24,772			$	38,930
Accounts receivable, net of allowance of $235 and $587 at June 30, 2014 and December 31, 2013, respectively			29,683				23,641
Unbilled revenue			13,418				11,213
Inventories			3,633				7,109
Prepaid expenses and other current assets			3,742				3,614
Deferred contract costs			5,955				9,313
Total current assets			81,203				93,820
Non-current assets:
Property and equipment, net			5,849				5,054
Intangible assets, net			4,890				5,202
Deposits and other assets			1,350				1,657
Goodwill			870				866
Total assets		$	94,162			$	106,599
Liabilities and shareholders’ equity:
Current liabilities:
Trade accounts payable		$	4,066			$	7,152
Accrued liabilities			11,435				11,939
Deferred revenue			11,351				15,785
Income tax payable			483				765
Current portion of debt			1,563				—
Total current liabilities			28,898				35,641
Non-current liabilities:
Uncertain tax positions			2,823				3,153
Other long-term liabilities			431				351
Long-term debt			23,365				23,423
Total liabilities			55,517				62,568
Commitments and contingencies
Shareholders’ equity:
Common stock, $0.001 par value. 300,000,000 shares authorized; 24,659,338 and 23,420,59 shares issued and outstanding at June 30, 2014 and
December 31, 2013, respectively			24				23
Additional paid-in capital			157,786				155,198
Accumulated deficit			(120,123	)			(112,187	)
Accumulated other comprehensive income			958				997
Total shareholders’ equity			38,645				44,031
Total liabilities and shareholders’ equity		$	94,162			$	106,599

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Mavenir Systems, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

	Six months ended June 30,
	2014			2013
Operating activities:
Net loss	$	(7,936	)	$	(7,935	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of property and equipment		1,634			1,082
Amortization of intangible assets		975			712
Amortization of debt discount		108			87
Net change in allowance for doubtful accounts		(312	)		301
Stock-based compensation expense		1,714			300
Unrealized foreign currency gain		(1,437	)		955
Loss on early extinguishment of debt		1,783			—
Changes in operating assets and liabilities:
Accounts receivable		(5,536	)		(4,416	)
Unbilled revenue		(1,976	)		2,072
Deposits and other current assets		(189	)		(146	)
Inventories		3,475			(1,712	)
Prepaid expenses		111			(1,806	)
Deferred contract costs		3,469			(2,791	)
Deferred revenue		(4,596	)		1,346
Accounts payable and accrued liabilities		(4,204	)		1,776
Net cash used in operating activities		(12,917	)		(10,175	)
Investing activities:
Purchases of property and equipment		(3,018	)		(1,413	)
Net cash used in investing activities		(3,018	)		(1,413	)
Financing activities:
Borrowing from long-term debt		25,000			15,000
Borrowing from line of credit		—			12,000
Repayments of long-term debt		(15,000	)		(2,000	)
Repayments of line of credit borrowing		(10,000	)		—
Exercise of options and warrants to purchase common stock		873			7
Net cash provided by financing activities		873			25,007
Effect of foreign currency exchange rate changes on cash and cash equivalents		904			(368	)
Net (decrease) increase in cash and cash equivalents		(14,158	)		13,051
Cash and cash equivalents at beginning of period		38,930			7,402
Cash and cash equivalents at end of period	$	24,772		$	20,453
Supplemental cash flow information:
Cash paid for interest	$	1,196		$	771
Income tax payments, net	$	378		$	136

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Mavenir Systems, Inc. and Subsidiaries

Revenue Metrics

(in thousands)

(unaudited)

	Three Months ended June 30,				Three months ended March 31,		Six Months ended June 30,
	2014		2013		2014		2014		2013
Revenue by type:
Software products	$	27,155	$	19,537	$	23,037	$	50,192	$	37,264
Maintenance		6,132		6,215		5,692		11,824		10,926
Total	$	33,287	$	25,752	$	28,729	$	62,016	$	48,190
Revenue by Product Group:
Video/Voice	$	20,259	$	9,511	$	22,611	$	42,870	$	14,840
Enhanced Messaging		13,028		16,241		6,118		19,146		33,350
Total	$	33,287	$	25,752	$	28,729	$	62,016	$	48,190
Revenue by Geographic Area:
Americas	$	19,676	$	12,906	$	13,635	$	33,311	$	21,336
EMEA		9,375		10,057		12,422		21,797		17,596
APAC		4,236		2,789		2,672		6,908		9,258
Total	$	33,287	$	25,752	$	28,729	$	62,016	$	48,190

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Mavenir Systems, Inc. and Subsidiaries

Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measures

(in thousands)

(unaudited)

	Three Months Ended June 30,						Three Months Ended March 31,			Six Months Ended June 30,
	2014			2013			2014			2014			2013
Software Products
Revenue	$	27,155		$	19,537		$	23,037		$	50,192		$	37,264
Cost of Revenue		11,912			10,763			9,953			21,865			17,414
Amortization and Depreciation		242			126			234			476			242
Stock Based Compensation		132			—			78			210			—
Gross Profit (GAAP)		15,243			8,774			13,084			28,327			19,850
Gross Profit (Non-GAAP)		15,617			8,900			13,396			29,013			20,092
Maintenance
Revenue		6,132			6,215			5,692			11,824			10,926
Cost of Revenue		2,943			1,497			2,744			5,687			2,827
Gross Profit (GAAP)		3,189			4,718			2,948			6,137			8,099
Gross Profit (Non-GAAP)		3,189			4,718			2,948			6,137			8,099
Total Revenue		33,287			25,752			28,729			62,016			48,190
Total Gross Profit (GAAP)		18,432			13,492			16,032			34,464			27,949
Gross Profit Margin % (GAAP)		55.4	%		52.4	%		55.8	%		55.6	%		58.0	%
Gross Profit (Non-GAAP)		18,806			13,618			16,344			35,150			28,191
Gross Profit Margin % (Non-GAAP)		56.5	%		52.9	%		56.9	%		56.7	%		58.5	%
Operations Expenses
R&D (GAAP)		7,190			5,376			6,133			13,323			11,498
Amortization and Depreciation		483			260			574			1,057			493
Stock Based Compensation		220			—			98			318			—
R&D (Non-GAAP)		6,487			5,116			5,461			11,948			11,005
S&M (GAAP)		8,228			4,615			6,871			15,099			9,656
Amortization and Depreciation		—			—			—			—			—
Stock Based Compensation		277			—			130			407			—
S&M (Non-GAAP)		7,951			4,615			6,741			14,692			9,656
G&A (GAAP)		5,244			4,370			5,250			10,494			9,361
Amortization and Depreciation		521			567			556			1,077			1,059
Stock Based Compensation		468			136			311			779			300
G&A (Non-GAAP)		4,255			3,667			4,383			8,638			8,002
Total Operating Expenses (GAAP)		20,662			14,361			18,254			38,916			30,515
Operating Expenses (Non-GAAP)		18,693			13,398			16,585			35,278			28,663
Operating Loss (GAAP)	$	(2,230	)	$	(869	)	$	(2,222	)	$	(4,452	)	$	(2,566	)
Net Interest		407			662			740			1,147			1,107
Loss on early extinguishment of debt		—			—			1,783			1,783			—
Foreign exchange (gain)/loss		849			912			(795	)		54			2,644
Income Taxes		405			1,198			95			500			1,618
Net Loss (GAAP)	$	(3,891	)	$	(3,641	)	$	(4,045	)	$	(7,936	)	$	(7,935	)
Operating Income (Loss) (Non-GAAP)	$	113		$	220		$	(241	)	$	(128	)	$	(472	)
Net Interest		407			662			740			1,147			1,107
Income Taxes		405			1,198			95			500			1,618
Adjusted for Uncertain Tax Positions Component		286			—			—			286			—
Net Loss (Non-GAAP)	$	(985	)	$	(1,640	)	$	(1,076	)	$	(2,061	)	$	(3,197	)

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Mavenir Systems, Inc. and Subsidiaries

Non-GAAP Net Loss Per Share

( In thousands, except share and per share data)

(Unaudited)

	Three months ended June 30,						Three months ended March 31,			Six months ended June 30,
	2014			2013			2014			2014			2013
GAAP weighted average common shares outstanding		24,170,641			1,340,710			23,429,820			23,800,231			1,338,211
Conversion of preferred shares *		—			16,452,467			—			—			16,452,467
Adjusted weighted average common shares outstanding		24,170,641			17,793,177			23,429,820			23,800,231			17,790,678
Non-GAAP net loss	$	(985	)	$	(1,640	)	$	(1,076	)	$	(2,061	)	$	(3,197	)
Non-GAAP net loss per share	$	(0.04	)	$	(0.09	)	$	(0.05	)	$	(0.09	)	$	(0.18	)

* Assumes conversion of preferred shares at beginning of period

CONTACT:

Investor Contacts:

Terry Hungle	Maryvonne Tubb
469-916-4393 x 5010	469-916-4393 x 5080
Mavenir Systems, Inc.	Mavenir Systems, Inc.
ir@mavenir.com

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