Exhibit 99.1
Investor Presentation | September 2015
Forward Looking Statements Certain statements herein are forward-looking statements and represent NeuLion’s current intentions in respect of future activities. Forward-looking statements can be identified by the use of the words “will,” “expect,” “seek,” “anticipate,” “believe,” “plan,” “estimate,” “expect,” and “intend” and statements that an event or result “may,” “will,” “can,” “should,” “could,” or “might” occur or be achieved and other similar expressions. These statements, in addressing future events and conditions, involve inherent risks and uncertainties. Although the forward-looking statements contained in this presentation are based upon what management believes to be reasonable assumptions, NeuLion cannot assure readers that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this presentation and NeuLion assumes no obligation to update or revise them to reflect new events or circumstances, except as required by law. Many factors could cause NeuLion’s actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including: our ability to attract new customers and increase revenue per customer; our ability to continue relationships with our customers and to negotiate favorable terms for contract renewals; our customers’ subscriber levels and financial health; our ability to derive anticipated benefits from the acquisition of DivX; our ability to successfully integrate the operations of DivX; our ability to pursue and consummate acquisitions in a timely manner; our ability to compete effectively and changes in the competitive environment; our ability to expand our product capabilities and acceptance rates of such products; our ability to accurately forecast revenue and appropriately plan expenses; our ability to integrate and expand our direct sales force; the attraction and retention of qualified employees and key personnel; our ability to protect and defend our intellectual property; unexpected events in the market for our solutions, including technological changes; general economic and market conditions; our ability to expand into new markets; future regulatory changes in our industry; foreign exchange, interest rate and credit risks. These factors should be considered carefully and readers should not place undue reliance on the forward-looking statements. A more detailed assessment of the risks that could cause actual results to materially differ from current expectations is contained in the “Risk Factors” section of NeuLion’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014, which is available on www.sec.gov and filed on www.sedar.com.
Deliver and enable the highest quality live and on-demand digital video content experiences anywhere and on any device NeuLion Mission
Enormous Industry Tailwinds & Market Opportunity– Fundamental Shift to Connected Devices: More people consuming more content on more devices– Addressing Significant Industry Problem: Live video delivery is mission-critical and very difficult Large Market Opportunity Large, Well-Known, Blue Chip Customer Base– Strong customer relationships with major Content Owners and CE Manufacturers– Live sports and entertainment are large and growing categories High-Profile Customer Base Compelling Financial Metrics– Recurring revenue with high margins and steady growth– Adjusted EBITDA positive since 2013– ~60% Adjusted EBITDA contribution margin Strong Financial Profile & Scalable Business Model Respected and Experienced Leadership Team– Deep technology and industry expertise– Track record and experience building businesses Experienced Management & Board Robust Technology Platform Proprietary, Turnkey, End-to-End, Cloud-Based, Configurable Solution– Early to market, at the forefront of shift to digital video content– High barriers to entry – unique, home-grown, end-to-end platform Investment Highlights
Delivered over 50,000 live sports events in 2014 Over 1 billion devices and 1 billion downloads in market 25 million application downloads Stream 300+ live linear channels, 24 hours a day – Sports & Entertainment 7.6 million online consumer transactions – subscription & PPV services 1.5 million video assets managed by the NeuLion Digital Platform Global PresenceHeadquartered: Plainview, NYTSX: NLNMarket Capitalization: US $147mEnterprise Value: US $127M 16 offices worldwide 500+ employees NeuLion by the Numbers
Y-o-Y Online Video Industry Growth (2) Internet Video Traffic (Exabytes) (1) 33% CAGR Mobile Traffic By Application (2) Cisco VNI Global IP Traffic Forecast 2014-2019 as of May 2015Cisco VNI Global IP Traffic Forecast 2014-2019 as of February 2015 The Global Sports Media Consumption Report 2014Futuresource Consulting, December 2014 Growth of 4K Resolution and Adoption (4)– Global 4K-enabled TV Shipments (Millions of Units) – 72% CAGR Digital Video Industry Trends – Rising Tide Lifts All Ships Sports Consumption on Connect Devices (3)– Self-identified Fans in 2014 –
Shifting Dynamics for All Customer Categories Increased consumption of digital video content on connected devicesLive and on-demand content creating massive opportunity to reach new addressable audiencesConsumers demanding more personalized and interactive experiencesDesire to deliver live and on-demand content anytime, anywhere Devices need secure playback of digital video content Consumers demanding Ultra HD / 4K resolution across all of their screens CE Manufacturers Content Owners
The Challenge of Delivering Live Digital Video Content Challenges Desire to deliver live and on-demand content anytime, anywhereSignificant infrastructure investment and expertiseLive events require real-time coordination and execution of technology and resourcesConsumers demand a more personalized and interactive experienceDevices need support, decode, decrypt and playback capabilities in high definition Proprietary, turnkey end-to-end cloud-based, configurable solutionSeamless delivery of live content and real-time customized viewer experiencesDevice agnostic content delivery platformHighly extensibleExtensive monetization optionsHigh quality resolution and enhanced viewing experience Solution NeuLion Platform
NeuLion owns and operates every piece of the end-to-end platform that seamlessly delivers high-quality, interactive content across multiple screens The Proprietary NeuLion Digital Platform
Engaging tools create a destination experience Immersive, Customized Viewing Experience Ultra HD / 4K 4K Multiple Camera Angles Integrated Stats Instant Replay Advanced User Control Live to VOD Clips Multi-Event Streaming Timeline Event Markers Integrated StatsMultiple Camera AnglesInstant ReplayMulti-Event StreamingTimeline Event MarkersSocial Media Integration 4 1 2 3 5 6 1 2 3 4 5 6
Smart TVs Gaming Devices & 3rd Party STB Smartphones & Tablets 1080i1080p4K NeuLion Delivers on All ScreensAll Video Formats
Reduces complexities for content rights holdersProprietary, turnkey, end-to-end solutionSpeed time to marketDistribution to multiple devicesEnhanced viewer experienceIncreased monetization opportunitiesSuperior customer and operational service Competitive Advantage
DivX Video Viewing Solution Better Screen ResolutionHigher QualityFaster Adaptive Bitrate StreamingReduced BufferingFaster Start Time, Video Loading Over 1 billion CE devices shipped worldwide CE Manufacturers MainConcept Advanced Media Processing Video Compression-Decompression ProgramsAdvanced Playback Solutions Integrate with Third Parties 40K+ HEVC files created per month Video Integrators NeuLion Empowers the Entire Ecosystem NeuLion Digital Platform End-to-end PlatformIngest Content FeedFormat for DeliveryEncode, TranscodeContent ManagementDelivery to Any Device MonetizationPerformance Analytics Delivered 225+ petabytes of video in 2014 Content Owners
82PB 154PB 227PB A petabyte is 1015 bytes of digital information. One petabyte is equivalent to 1,000 terabytes. Usage has almost tripled since 2012 Petabytes Streamed (1) 300PB + Increasing NeuLion Customer Usage
Live Sports & Entertainment Movies User Generated VALUE Content Type NeuLionFocus NeuLion’s customers have the highest value content Digital Content Pyramid
Content Owners Video Integrators CE Manufacturers Attractive Blue Chip Customer Base
Selected to Deliver the 2014 FIFA World Cup on Multiple Devices Result: Unprecedented Digital Traffic Delivered mission critical live and on-demand contentEnabled Univision users to view live streams of all matches on their connected devicesEnabled Univision users to view real-time highlights tied to match stats, match schedules, team alerts, and others Univision Deportes + NeuLion 74M Live video streams 4x as many unique live stream viewers as the 2010 FIFA World Cup 87% 87% of Univision Digital WC traffic came from a mobile device, 37% for 2010 WC 10 Millionunique live stream viewers, 12% lift to TV audience
Selected to Power its Digital Video Experience WorldwideResult: A go-to, hard-hitting online destination with access to everything UFC for fans to interact and engage with anytime, anywhere Complete access to pay-per-view events with ability to watch in multiple angles, score the fight round-by-round, view real-time stats and moreMonthly subscription service, Fight Pass, gives fans access to exclusive UFC fights, original programming, behind the scenes content and access to the largest mixed martial arts fight library in the world 150+ Countries UFC.TV is available in over 150 countries Largest mixed martial arts fight library in the world Fight PassThe first global digital only channel MMA Over 20 DevicesSupports delivery to over 20 different device models UFC + NeuLion
Internal Deployments Proprietary, End-to-End, Fully Integrated, Configurable Solution Technology Licensee Technology Licensee High Perception of Value: Live Content Delivery Offered At Reasonable Price High-cost alternative Expensive; Potentially Ineffective Dedicated Account Management & Customer/Operational Support Investment in Internal Resources Deep Industry Expertise with a Global Sales Footprint U.S. Sales Focus NA Ability to Utilize Large, Recognizable Customer Base to Attract New Ones NA Best of Breed Platform
Compelling Growth Drivers
Board of Directors Kanaan JemiliChief Executive Officer Chris WagnerEVP, Marketplace Strategy Arthur McCarthyChief Financial Officer Roy ReichbachGeneral Counsel and Corporate Secretary Michael HerCo-Chief Technology Officer Eric GrabCo-Chief Technology Officer Ronald NunnEVP, Business Operations Charles B. WangChairman of the Board Nancy LiExecutive Vice Chairman Roy ReichbachGeneral Counsel and Corporate Secretary Gabriel A. BattistaDirector Shirley Strum KennyDirector David KronfeldDirector Robert E. BostromDirector John A. CoelhoDirector James HaleDirector Management Team
Financial Overview
Recurring license revenue drives higher visibility High and expanding margins – Adj. EBITDA positive since 2013 Land and expand model – customers scale over time Financial Highlights Usage revenue provides upside potential Scalable business model with significant operating leverage
Recurring Revenue Model Larger audienceMore content, features, devicesAdded events Setup Fixed/License Fees Variable NeuLion Digital PlatformSubscription basis# of channels, events# of connected devicesVariable basisVolume of digital video contentLevel of advertising and ecommerce activitySupport servicesDivX & MainConceptSubscription license agreements and variable per unit fees Source: Management estimate, based on historical results.
Land and Expand Revenue ModelActual Content Owner Customer Case Study Grows over time as customers grow the:# of Channels# of EventsNumber of connected devices Volume of digital video contentGrows as more customers are added and existing customers expand their use of our solution Note: Annotations above denote price configuration assumptions
($ in millions) NeuLion 2012 NeuLion 2013 NeuLion 2014 Pro Forma 2014 Pro Forma 1H14 Pro Forma 1H15 Total Revenue $39.0 $47.1 $55.5 $81.8 $40.0 $46.6 Cost of Revenue % 35.1% 28.2% 25.0% 25.3% 27.4% 18.8% SG&A(1) $23.5 $24.3 $27.1 $46.1 $21.7 $23.0 R&D $6.7 $7.4 $8.4 $30.9 $15.7 $14.6 Adjusted EBITDA(2) $(3.3) $3.5 $8.4 $17.4 $7.8 $11.1 Net Income (Loss) $(10.1) $(2.3) $3.6 $(24.9) $(14.3) $(5.9) Includes stock based compensationAdjusted EBITDA represents net income (loss) before interest, income taxes, depreciation and amortization, stock-based compensation, acquisition-related expenses, purchase price accounting adjustments, impairment of intangibles, discount on convertible note, loss on dissolution of majority-owned subsidiary, gain on revaluation of convertible note derivative, investment income/expense and foreign exchange gain/loss. Scalable Business Model with Significant Operating Leverage Income Statement Highlights
Income Statement Highlights Q2’15 Q1’15 Q4’14 Q3’14 Q2’ 14 Q1’14 Total Revenue $22.7 $21.7 $16.5 $12.2 $13.4 $13.5 Cost of Revenue as a % of Revenue 19% 20% 25% 23% 26% 26% SG&A(1) $11.4 $9.9 $8.0 $6.3 $6.4 $6.4 R&D $7.5 $5.3 $2.1 $2.1 $2.2 $2.0 Non-GAAP Adjusted EBITDA $4.2 $6.8 $3.5 $1.3 $1.6 $2.0 GAAP Net Income (Loss) $(3.2) $(0.5) $1.6 $0.2 $0.6 $1.1 Diluted EPS $(0.01) $0.00 $0.01 $0.00 $0.00 $0.00 High margin business with increasing revenue momentumCrossed over to GAAP profitability in Q4 2013First and fourth quarters are seasonally strongestQ1 2015 includes 2 months of DivXQ2 2015 includes first full quarter of DivX Scalable Business Model with High Operating Leverage Includes stock based compensation
(in $000) 6/30/2015 3/31/2015 12/31/2014 Cash & Equivalents 34,059 35,225 25,898 Receivables * 22,519 31,177 8,056 Total Current Assets 61,131 70,435 36,287 Payables 6,996 12,201 14,362 Deferred Revenue 9,364 10,978 9,602 Total Current Liabilities 24,100 31,400 29,212 Convertible Note and Note Derivative** 0 27,119 0 Working Capital 37,031 39,035 7,075 Other Long-Term Liabilities 6,985 7,268 2,673 Total Redeemable Preferred Stock 14,970 14,962 14,955 Total Equity 61,627 37,284 5,099 Total Liabilities and Equity 107,691 118,034 51,938 * Reflects accounting for the DivX acquisition ** Part of the consideration for the DivX acquisition converted to 25.8M common shares on June 4, 2015 Q2 Balance Sheet Highlights
Enormous Industry Tailwinds & Market Opportunity– Fundamental Shift to Connected Devices: More people consuming more content on more devices– Addressing Significant Industry Problem: Live video delivery is mission-critical and very difficult Large Market Opportunity Large, Well-Known, Blue Chip Customer Base– Strong customer relationships with major Content Owners and CE Manufacturers– Live sports and entertainment are large and growing categories High-Profile Customer Base Compelling Financial Metrics– Recurring revenue with high margins and steady growth– Adjusted EBITDA positive since 2013– ~60% Adjusted EBITDA contribution margin Strong Financial Profile & Scalable Business Model Respected and Experienced Leadership Team– Deep technology and industry expertise– Track record and experience building businesses Experienced Management & Board Robust Technology Platform Proprietary, Turnkey, End-to-End, Cloud-Based, Configurable Solution– Early to market, at the forefront of shift to digital video content– High barriers to entry – unique, home-grown, end-to-end platform Investment Highlights