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Palm earnings release presentation Q2FY09

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Q2 Fiscal Year 2009
Financial Results
Ed Colligan, President & CEO
Andy Brown, SVP & CFO
December 18, 2008
2
Safe Harbor
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS:
This press release contains forward-looking statements within the meaning of the federal securities laws, including, without
limitation, statements regarding Palm’s ability to deliver a breakthrough new platform and products, to bring a
differentiated smartphone experience to market, to be and to be recognized as a leading innovator, to utilize net operating
loss carryforwards and to become profitable. These statements are subject to risks and uncertainties that could cause
actual results and events to differ materially, including, without limitation, the following: fluctuations in the demand for
Palm’s existing and future products and services and growth in Palm’s industries and markets; Palm’s ability to forecast
demand for its products; possible defects in products and technologies developed; Palm’s ability to introduce new products
and services successfully and in a cost-effective and timely manner; Palm’s ability to develop its new operating system;
Palm’s ability to timely and cost-effectively obtain components and elements of its technology from suppliers; Palm’s ability
to obtain other key technology from third parties free from errors and defects, integrate it with Palm’s products and meet
certification requirements, all on a timely basis; Palm’s ability to compete with existing and new competitors; Palm’s
dependence on wireless carriers and ability to meet wireless-carrier certification requirements; Palm’s dependence on a
concentrated number of significant customers; and Palm’s ability to adjust to changing market conditions. A detailed
discussion of these and other risks and uncertainties that could cause actual results and events to differ materially from
such forward-looking statements is included in Palm’s most recent filings with the Securities and Exchange Commission,
including Palm’s quarterly report on Form 10-Q for the quarter ended Aug. 29, 2008, under the caption Risk Factors and
elsewhere. Palm undertakes no obligation to update forward-looking statements to reflect events or circumstances
occurring after the date of this press release.
(1) GAAP stands for Generally Accepted Accounting Principles.
Palm, Treo and Centro are among the trademarks or registered trademarks owned by or licensed to Palm, Inc. All other
brand and product names are or may be trademarks of, and are used to identify products or services of, their respective
owners.
Andy Brown
SVP & CFO
4
Palm SmartphonesPalm Smartphones
• Smartphone Revenue
=$171mm
• Shipments of 556,000 units
• ASP increased vs. Q1 ’09 to
$305 per unit
• Sell-Through of 599,000
units
5
Palm HandheldsPalm Handhelds
• Handheld Revenue
=$21mm
• Net Revenue Shipments
of 111,000 units
• Sell-Through of 158,000
units
6
Q2 FY’09 Financial Results
Q2 FY 2009 Q1 FY 2009
GAAP Gross Margin as a % of Revenue 19.9% 26.5%
Non GAAP Gross Margin as a % of Revenue 20.1% 26.6%
7
Q2 FY’09 Financial Results
Q2 FY 2009 Q1 FY 2009
GAAP Gross Margin as a % of Revenue 20.1% 26.5%
Non GAAP Gross Margin as a % of Revenue 20.1% 26.6%
GAAP Operating Expense $115.7mm $119.2mm
Non GAAP Operating Expense $101.1mm $113.6mm
8
Q2 FY’09 Financial Results
Q2 FY 2009 Q1 FY 2009
GAAP Gross Margin as a % of Revenue 19.9% 26.5%
Non GAAP Gross Margin as a % of Revenue 20.1% 26.6%
GAAP Operating Expense $115.7mm $119.2mm
Non GAAP Operating Expense $101.1mm $113.6mm
GAAP Net Loss $(508.6)mm $(41.9)mm
Non GAAP Net Loss $(80.2)mm $(12.8)mm
GAAP Net Loss per Common Share $(4.64) $(0.39)
Non GAAP Net Loss per Common Share $(0.73) $(0.12)
9
Q2 FY’09 Financial Results
Q2 FY 2009 Q1 FY 2009
GAAP Gross Margin as a % of Revenue 19.9% 26.5%
Non GAAP Gross Margin as a % of Revenue 20.1% 26.6%
GAAP Operating Expense $115.7mm $119.2mm
Non GAAP Operating Expense $101.1mm $113.6mm
GAAP Net Loss $(508.6)mm $(41.9)mm
Non GAAP Net Loss $(80.2)mm $(12.8)mm
GAAP Net Loss per Common Share $(4.64) $(0.39)
Non GAAP Net Loss per Common Share $(0.73) $(0.12)
EBITDA $(84.5)mm $(27.8)mm
Adjusted EBITDA $(55.8)mm $(7.4)mm
10
Q2 FY’09 Financial Results
Q2 FY 2009 Q1 FY 2009
Cash, Equivalents & Short Term Investments $224mm $248.3m
Cash Used by Operations $(20.4)mm $(3.6)mm
11
Q2 FY’09 Financial Results
Q2 FY 2009 Q1 FY 2009
Cash, Equivalents & Short Term Investments $224mm $248.3m
Cash Used by Operations $(20.4)mm $(3.6)mm
Inventories $28.5mm $35.2mm
Inventory Turns 19x 21x
12
Q2 FY’09 Financial Results
Q2 FY 2009 Q1 FY 2009
Cash, Equivalents & Short Term Investments $224mm $248.3m
Cash Used by Operations $(20.4)mm $(3.6)mm
Inventories $28.5mm $35.2mm
Inventory Turns 19x 21x
Accounts Receivable $98.2mm $141.6m
DSOs 46 35
13
Ed Colligan
President & CEO
15
“In an environment like we’re seeing today,
the best thing we can do for our shareholders
is to maintain discipline and execute against
our long-range strategic plan….”
Ed Colligan
President & CEO
16
Product DevelopmentProduct Development
• We are maintaining our stride
on the product development
front
• Our new platform is nearing
completion
• Our “next gen” phone is set for
launch in the first half of calendar
year ’09 as planned
17
Treo Pro smartphone
Palm Differentiation on Windows Mobile platform
•Sleek design
•4th generation, high speed 3G radio
•GPS location-based
•WiFi with a unique Palm
“instant-on” design
•Outstanding battery life
18
Treo Pro smartphone
• Recently released in New Zealand
and 7 new Latin American markets
19
Treo Pro smartphone
• Recently released in New Zealand
and 7 new Latin American markets
• Certified on AT&T’s open network
20
Treo Pro smartphone
• Recently released in New Zealand
and 7 new Latin American markets
• Certified on AT&T’s open network
• Offered as a generic skew by
T-Mobile
21
Treo Pro smartphone
• Recently released in New Zealand
and 7 new Latin American markets
• Certified on AT&T’s open network
• Offered as a generic SKU by
T-Mobile
• Expected Q3 FY ’09 launch
•with a major U.S. carrier
22
“For the rapidly expanding consumer market,
we think Palm’s breakthrough new platform
will bring a truly differentiated experience to
users….”
Ed Colligan
President & CEO
23
• Palm has the ability to
develop hardware and software
in tandem and integrate them
seamlessly
PalmPalm’’s Competitive Advantagess Competitive Advantages
24
• Palm has the ability to
develop hardware and software
in tandem and integrate them
seamlessly
• Palm owns the elements of
the architecture to support the
growing number of applications
and services
PalmPalm’’s Competitive Advantagess Competitive Advantages
25
• Palm has the ability to
develop hardware and software
in tandem and integrate them
seamlessly
• Palm owns the elements of
the architecture to support the
growing number of applications
and services
• Palm has an established
developer “ecosystem” excited
to work with our new platform
PalmPalm’’s Competitive Advantagess Competitive Advantages
26
27
Q & A
Andy Brown
SVP & CFO
Ed Colligan
President & CEO

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