Connectivity Solutions Innovative Solutions Tailor Made Solutions 字 0 Off-the-shelf Products Investor Presentation April 29, 2021 2 Safe Harbor Guidelines & Legal Notes The information presented today contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Such statements may include, but are not limited to, anticipated future financial and operating results and Silicom's outlook and prospects. Those statements are based on management's current beliefs, expect ...

Financial Performance - Sales in 2020 were US$ 107,398 thousand, a slight increase from US$ 105,240 thousand in 2019, despite challenges from Covid-19[226] - Gross profit in 2020 was US$ 33,766 thousand, representing 31.4% of sales, down from 34.3% in 2019, primarily due to a US$ 1.7 million impairment of intangible assets[228] - Net income in 2020 was US$ 5,725 thousand, a decrease of 44.1% from US$ 10,236 thousand in 2019, due to lower gross profit and higher operating expenses[243] Expenses - Research and development expenses increased by 14.4% to US$ 17,244 thousand in 2020, driven by higher employee-related costs and investments in new product development[231] - Sales and marketing expenses decreased by 6.6% to US$ 6,209 thousand in 2020, mainly due to reduced travel expenses during the pandemic[233] - General and administrative expenses slightly decreased by 2.3% to US$ 4,065 thousand in 2020, attributed to lower payroll-related expenses[236] Cash Flow and Working Capital - Cash provided by operating activities in 2020 was US$ 4,956 thousand, significantly lower than US$ 26,726 thousand in 2019, primarily due to net income and inventory changes[252] - Working capital as of December 31, 2020, was US$ 106,853 thousand, with a current ratio of 4.64[248] - Cash and cash equivalents increased by US$ 4,207 thousand to US$ 20,676 thousand as of December 31, 2020[248] Investments and Securities - Short-term marketable securities increased by US$ 21,072 thousand to US$ 35,117 thousand as of December 31, 2020[248] - The investment portfolio consisted of approximately US$ 50.4 million in corporate and government debt securities, all classified as "held to maturity" and in fixed-rate instruments[520] Trade and Inventory - Trade receivables decreased to US$ 21,660 thousand as of December 31, 2020, down from US$ 24,936 thousand as of December 31, 2019, reflecting improved average payment terms with customers[249] - Trade payables decreased to US$ 14,610 thousand as of December 31, 2020, compared to US$ 16,419 thousand as of December 31, 2019, due to changes in payment terms with suppliers[250] - Inventories increased to US$ 47,650 thousand as of December 31, 2020, up from US$ 36,491 thousand as of December 31, 2019, driven by increased inventory purchasing to meet customer delivery expectations[251] Future Outlook and Trends - The shift to Cloud and trends of Disaggregation and Decoupling are expected to impact product demand, with a decrease in Server Adapters but an increase in demand for Smart Cards and CPE devices[272][274] - The company anticipates positive impacts from the O-RAN trend, allowing for separate procurement of hardware and software, enhancing market opportunities[275] - Long sales cycles in the market necessitate continuous achievement of Design Wins for sustained long-term revenues[276] Liabilities and Obligations - As of December 31, 2020, the total outstanding contractual obligations amounted to approximately US$ 40,790 thousand, with operating leases contributing US$ 8,120 thousand and purchase obligations US$ 32,670 thousand[284] - The liability for employees' severance benefits was approximately US$ 3,256 thousand as of December 31, 2020[285] Currency and Exchange Rate Risks - Accounts receivable in NIS amounted to US$ 4,210 thousand, with a potential decrease of US$ 383 thousand estimated from a hypothetical 10% increase in the Dollar exchange rate[525] - The company had accounts payable in NIS amounting to US$ 10,522 thousand, with a potential increase of US$ 1,175 thousand estimated from a hypothetical 10% decrease in the Dollar exchange rate[525] - A hypothetical 10% weakening of the U.S. Dollar relative to the NIS would have resulted in an increase in operating expenses of approximately US$ 1,101 thousand for the year ended December 31, 2020[530] - The company is not engaged in any hedging or other transactions intended to manage risks related to foreign currency exchange rate or interest rate fluctuations as of December 31, 2020[531] Customer Concentration - The top three customers accounted for approximately 36% of the company's revenues in 2020, indicating a significant reliance on a small number of customers[533] Indemnification Agreements - The maximum liability under the Indemnification Agreements for any monetary obligation imposed on an officer or director is currently US$ 3,000,000 for each instance of a covered scenario[278] - The company is not aware of any material pending action that may result in anyone claiming indemnification under the Indemnification Agreements[278]

onnectivity Solutions Innovative Solutions Tailor Made Solutions 13 0 Off-the-shelf Products Investor Presentation January 28, 2021 2 Safe Harbor Guidelines & Legal Notes The information presented today contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Such statements may include, but are not limited to, anticipated future financial and operating results and Silicom's outlook and prospects. Those statements are based on management's current beliefs, expe ...

Financial Data and Key Metrics Changes - The company reported revenue of $33.9 million for Q4 2020, a 33% increase year-over-year and a 19% increase sequentially [8][40] - Net income for the quarter was $4 million, representing a 29% increase compared to Q4 2019 and a 36% increase from the previous quarter [9][46] - Earnings per diluted share were $0.56, a 37% increase year-over-year [47] - The company ended the quarter with over $76 million in net cash and no debt [9][48] Business Line Data and Key Metrics Changes - The geographical revenue breakdown showed North America at 61%, Europe and Israel at 33%, and the Far East and the rest of the world at 6% [41] - The company experienced a significant demand for Smart Cards and CPE devices due to trends in cloud services and disaggregation [16][17] Market Data and Key Metrics Changes - The company noted that its top three customers accounted for about 35% of revenues over the last 12 months [41] - The ongoing trends in cloud services and disaggregation are expected to drive significant growth in the networking market [21][22] Company Strategy and Development Direction - The company has focused its R&D investments on cloud-related trends, disaggregation, and decoupling, which have shown positive results [11][12] - The strategy includes targeting the mobile 4G/5G infrastructure market through O-RAN standards, which presents substantial opportunities [18][21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's positioning for 2021 and beyond, expecting revenues between $120 million and $130 million, representing a 17% year-over-year growth at the midpoint [35][36] - The company acknowledged challenges related to supply chain constraints but is taking proactive measures to mitigate these issues [51][57] Other Important Information - The company took a one-time $1.7 million impairment charge to its cost of sales due to strategic focus adjustments [43] - The company executed a $15 million share buyback plan, purchasing approximately 111,000 shares at a total cost of $4.2 million during Q4 [48] Q&A Session Summary Question: Supply constraints and resolution - Management acknowledged the unusual supply constraints and outlined steps taken to mitigate the impact, including early orders and collaboration with customers [50][52][54] Question: Guidance on exchange rates and R&D investments - Management indicated that while R&D investments are increasing, they are focused and strategic, with an anticipated effective tax rate of approximately 15% for 2021 [58][66] Question: SD-WAN project ramp-up - Management confirmed that one SD-WAN project is still not ramping up, but new design wins are expected to contribute to revenue growth [75][77] Question: Future capital allocation plans - Management stated that future capital allocation decisions will be made closer to the end of the current buyback program [96] Question: Expectations for 5G and SD-WAN deployments - Management expressed confidence in achieving additional design wins in both 5G and SD-WAN markets, supported by a strong pipeline [97]

Financial Data and Key Metrics Changes - The company reported revenue of $28.4 million for Q3 2020, an 18% increase year-over-year and a 23% increase sequentially [9][32] - Net income for the quarter was $2.9 million, a 15% increase compared to $2.5 million in Q3 2019, and a 59% increase from the prior quarter [10][36] - Earnings per diluted share were $0.41, reflecting a 31% year-over-year increase and a 58% sequential increase [37] - Gross profit was $9.4 million with a gross margin of 33.3%, compared to a gross profit of $8.5 million and a gross margin of 35.2% in Q3 2019 [35] Business Line Data and Key Metrics Changes - The decline in demand for server adapter products was offset by growth in the SD-WAN business, driven by a shift towards disaggregated architectures [13][15] - The company achieved significant wins in the SD-WAN market, with a combined revenue potential of approximately $10 million per year from new uCPE device wins [24] Market Data and Key Metrics Changes - Geographical revenue breakdown showed North America at 68%, Europe and Israel at 25%, and the Far East and Rest of the World at 7% [33] - The top three customers accounted for about 35% of total revenues [33] Company Strategy and Development Direction - The company is focusing on the telco and mobile markets, capitalizing on trends such as the disaggregation of hardware and software in network architectures [13][19] - The Open Radio Access Networks (O-RAN) initiative presents new opportunities for the company as telcos seek to reduce costs and enhance efficiencies [18][27] - The company is positioned to benefit from the growing demand for 4G/5G infrastructure projects and telco cloud solutions [27][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for continued revenue growth into Q4 2020, projecting revenues between $30 million and $31 million [28] - The company anticipates a double-digit compound annual growth rate for several years ahead as markets return to normal [29] - Management acknowledged ongoing uncertainties due to COVID-19 but remains confident in growth for 2021 [89] Other Important Information - The company ended Q3 2020 with over $86 million in net cash and no debt, utilizing cash for a share buyback program [10][37] - The company executed a $16 million share buyback plan, purchasing approximately 100,000 shares at a total cost of $3.6 million during the quarter [38] Q&A Session Summary Question: Clarification on contract conversations and revenue potential - Management confirmed that the $10 million revenue potential from recent wins does not include the Tier 1 O-RAN project, which is still in testing [40] Question: Update on Tier 1 projects in the U.S. - One Tier 1 project has ramped up significantly, while the other has stalled as the customer reassesses their strategy [41][42] Question: Impact of consolidation in the SD-WAN space - Management noted that acquisitions typically have a short-term positive impact, but long-term effects are uncertain [43][45] Question: Changes in legacy product lines due to COVID-19 - The decline in demand for server adapters continues, but the rate of decline is not accelerating significantly [46][49] Question: Relationship with Intel and its impact - The cooperation with Intel is growing, with joint developments in eASIC and FPGA cards, which are expected to enhance market presence [50][54] Question: FPGA segment performance and strategy - Management acknowledged a lack of significant FPGA design wins recently, focusing instead on new developments in the O-RAN area [80] Question: COVID-19 impact on operations - The company has had a few COVID-19 cases but has implemented measures to maintain operations effectively [94] Question: Visibility into 2021 - Management believes 2021 will be a growth year, despite uncertainties related to COVID-19 [89] Question: Plans for excess cash - The company is on track with its share buyback plan and is open to exploring M&A opportunities if synergies are identified [92][93]

Investor Presentation October 29, 2020 Safe Harbor Guidelines & Legal Notes The information presented today contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Such statements may include, but are not limited to, anticipated future financial and operating results and Silicom's outlook and prospects. Those statements are based on management's current beliefs, expectations and assumptions, which may be affected by subsequent business, political, environmenta ...

Silicom Ltd (NASDAQ:SILC) Q2 2020 Earnings Conference Call July 29, 2020 9:00 AM ET Company Participants Ehud Helft – GK Investor Relations Shaike Orbach – Chief Executive Officer Eran Gilad – Chief Financial Officer Conference Call Participants Alex Henderson – Needham and Company Harris Leviton – Private Investor Operator Ladies and gentlemen, thank you for standing by. Welcome to the Silicom Second Quarter 2020 Results Conference Call. All participants are present in listen-only mode. Following managemen ...

Financial Performance & Growth - The company has a consistent performance with 62 quarters (15 years) of continuous profitability[11] - Revenues have increased by X5 (CAGR – 18%) in the last ten years[11] - Operating Profit has increased by X5.5 (CAGR – 19%) in the last ten years[11] - In Q2 2020, revenues were $23.0 million, with a gross profit of $7.8 million (34.0% of revenues), operating income of $2.0 million (8.5% of revenues), and net income of $1.8 million (8.0% of revenues)[33] - In 2019, revenues were $105.2 million, with a gross profit of $36.5 million (34.7% of revenues), operating income of $12.6 million (11.9% of revenues), and net income of $12.5 million (11.9% of revenues)[35] Market Position & Strategy - The company is a leading provider of Data Center & Edge Computing solutions[5] - The company has over 400 active Design Wins with 170+ customers[13] - Cyber Security accounts for 32% of the last twelve months revenues, Network Appliances 25%, and Platforms/Infrastructure 27%[15] - North America accounts for 70% of global markets, EMEA 23%, and APAC 7%[15] Balance Sheet - The company has a strong balance sheet with $93 million in cash and no debt[11]

Financial Data and Key Metrics Changes - Revenue for Q1 2020 was reported at $22.2 million, a decrease of 26.4% from $30.2 million in Q1 2019, and aligned with the updated guidance of $21 million to $22 million [8][19] - Gross profit for Q1 2020 was $7.3 million, resulting in a gross margin of 33%, compared to a gross profit of $10.3 million and a gross margin of 34.1% in Q1 2019 [20] - Operating income decreased to $1.6 million in Q1 2020 from $4.4 million in Q1 2019, while net income was $2.3 million or 10.3% of revenues, down from $4 million or 13.3% in the previous year [20] - Earnings per diluted share were $0.31, compared to $0.52 in Q1 2019 [20] - As of March 31, 2020, the company had $79.9 million in cash and cash equivalents, with no debt, equating to $11.05 per outstanding share [21] Business Line Data and Key Metrics Changes - The company reported a strong focus on Edge compute units and FPGA solutions, which are expected to drive future growth [13][18] - A significant purchase order of $15 million for the Intelligent Bypass unit was received from a major systems integrator, indicating ongoing demand for traditional products [11][12] Market Data and Key Metrics Changes - Geographical revenue breakdown showed North America contributing 70%, Europe and Israel 23%, and the Far East and rest of the world 7% [19] - The company noted that its top three customers accounted for approximately 35% of revenues over the last 12 months [19] Company Strategy and Development Direction - The company is focusing on providing full solutions that integrate Edge compute units with FPGA and other offloading solutions, which is seen as a unique capability in the market [13][14] - Management emphasized the importance of the Telco space and the growing interest from customers in integrated hardware solutions [14][15] - The company is optimistic about long-term growth opportunities, particularly in Edge-related business and FPGA solutions for cloud and Telco data centers [18] Management Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by the COVID-19 pandemic, particularly in supply chain disruptions and logistics, but noted that demand has not decreased [22][24] - The company refrained from issuing guidance for Q2 2020 due to limited visibility but expressed optimism for a return to growth once pandemic-related disruptions subside [16][18] - Management highlighted the strategic potential of the new relationship with the major systems integrator, which could lead to further opportunities in government projects [12][43] Other Important Information - The company authorized a new share repurchase plan of up to $15 million, with approximately $13 million already spent on repurchasing shares in the previous plan [17] - The company reported a sequential decline in operating expenses, attributed to reduced travel costs due to the pandemic [32][34] Q&A Session Summary Question: Supply and logistics pressures due to COVID-19 - Management indicated that most issues experienced were related to supply chain delays, particularly from vendors in quarantine, and not a reduction in demand [22][24] Question: Expectations for supply constraints in the June quarter - Management noted that while supply constraints persist, it is unclear if conditions will worsen or improve in the upcoming quarter [25][26] Question: Gross margin dip in the March quarter - The dip was attributed mainly to a change in product mix, with more Edge products sold, rather than increased costs [29] Question: Update on SD-WAN demand - Management reported an increase in demand for low-end devices due to work-from-home initiatives, while higher-end units saw a decline [37] Question: Timing for shipping the $15 million order - Shipments are expected to begin in Q3 2020, contingent on resolving supply chain issues [42] Question: Stock buyback details - The company repurchased approximately $5 million in stock during Q1 2020, with an average cost of $30 per share [44][71] Question: Future demand outlook - Management expressed uncertainty about the timing of demand recovery but noted that demand has not disappeared [52]

Investor Presentation April 30, 2020 Safe Harbor Guidelines & Legal Notes The information presented today contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Such statements may include, but are not limited to, anticipated future financial and operating results and Silicom's outlook and prospects. Those statements are based on management's current beliefs, expectations and assumptions, which may be affected by subsequent business, political, environmental, ...