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Investor Presenta,on   Nick  Jensen   CEO   Dialogic  Inc.   May  2012  

© COPYRIGHT  2012  DIALOGIC,  INC.    ALL  RIGHTS  RESERVED.          |          www.dialogic.com  


Safe Harbor   These  slides  and  the  accompanying  oral  presentaJon  contain  forward-­‐looking  statements  and  informaJon.  Words   such  as  may,  will,  expects,  intends,  plans,  believes,  targets,  esJmates  and  variaJons  of  these  words  are  intended  to   idenJfy  forward-­‐looking  statements.    By  discussing  the  current  percepJon  of  the  market  and  making  these   forward-­‐looking  statements,  Dialogic  is  not  undertaking  an  obligaJon  to  provide  updates  in  the  future.    Actual   results  may  differ  materially  from  those  projected  in  these  forward-­‐looking  statements  and  no  one  should  assume   at  a  later  date  that  these  comments  from  today  are  sJll  valid.     All  of  these  forward-­‐looking  statements  are  based  on  esJmates  and  assumpJons  by  Dialogic  management  that,   although  are  believed  to  be  reasonable,  are  inherently  uncertain.    Forward-­‐looking  statements  involve  risks  and   uncertainJes,  including,  but  not  limited  to,  economic,  compeJJve,  governmental  and  technological  factors  outside   of  the  control  of  Dialogic,  risks  related  to  the  adopJon  and  roll-­‐out  of  products,  risks  related  to  ability  to  capitalize   on  growth  opportuniJes  and  markets,  risks  related  to  the  ability  to  manage  growth,  risks  related  to  the  synergies   from  Dialogic  acquisiJons  and  other  risks  that  may  cause  the  business,  industry,  strategy  or  actual  results  to  differ   materially  from  the  forward-­‐looking  statements.       In  addiJon  to  the  above,  please  refer  to  the  risk  factors  secJon  of  Dialogics  most  recent  filings  with  the  SEC  for  a   detailed  discussion  on  risks  that  could  cause  these  differences.    Any  future  product  feature  or  related  specificaJon   that  may  be  referenced  are  for  informaJon  purposes  only  and  are  not  commitments  to  deliver  any  technology  or   enhancement.    Dialogic  reserves  the  right  to  modify  future  product  plans  at  any  Jme.    

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About Dialogic  (Nasdaq:DLGC)   !   HQ  in  Milpitas,  CA   !   Approximately  700  employees   !   Strategic  por^olio  driven  by  global                                                                                                                                                                                             rise  of  mobility  and  rapid  expansion                                                                                                                                                                                                       of  VoIP   !   Customers  include  23  of  25  top                                                                                                                                                     global  Mobile  Carriers  and  80%  of  the                                                                                                                                                   Fortune  2,000   !   Impact  2  billion  mobile  subscribers  and  15   billion  VoIP  minutes  /  month   !   Over  200  patents  issued  or  pending   3  

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Mobile Experience  MaMers™   !    Markets  are  being  transformed  by  Mobility   !    Worldwide  phenomenon  with  broad  impact   !    Business  models  evolving  rapidly   !  Lines  blurring  for  Enterprise  and  Service  Provider   !  Cloud  increasing  accessibility  and  transparency     !    Dialogic  has  the  experience  with  Content    Aggregators,  Service  Providers  and  Subscribers                  to  drive  profits  from  this  shi>  

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Mul,media Rules   !    Smartphone  subscribers  in  2014    are  forecast  to  exceed  the  2.1B    global  Internet  users  today1  

VIDEO: 64.4%  

MOBILE WEB/   OTHER  DATA:  21.1%  

!   In  a  Smartphone  world,                          Voice  is  no  longer  the  primary    consumer  of  mobile  bandwidth   !    Mobile  Video  and  Data  are    dominant  in  this  new  paradigm   !    Dialogic  has  a  25+  year  history  in    enabling  and  ensuring  Voice,            Video  and  Data  soluDons  

VOICE CALLING:0.4%  

Source: 1JP Morgan, Global Smartphone Model, December 2011 Chart: NokiaSiemens Networks Infographic, September 2011

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FILESHARING: 5.9%   BUSINESS  DATA:  4.7%   VIDEO  CALLING:  1.9%   ONLINE  GAMING:  1.4%  


Mobile Video  Challenges   !    Mobile  Video  has  tremendous  potenJal  for  all   !    But  the  subscriber  experience  is  challenged:   ! Different  networks,  different  technologies   ! Different  phones,  different  business  models  

!    Profits,  especially  for  Service  Providers,  can              be  elusive  due  to  Over-­‐The-­‐Top  providers  and    service  quality  issues     !    Dialogic  is  about  moneDzing  the  mobile    experience  from  end  to  end  

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Network Conges,on   !    Networks  cannot  keep  pace  with  the  flood  of    data  applicaJons  and  bandwidth  demands   !    Not  just  a  rush  hour  problem   !    More  than  50%  of  mobile  subscribers  are    seeking  a  beger  experience   !    Dialogic  can  dramaDcally  improve  network    performance  and  capacity  without  reducing    Voice,  Video  or  Data  quality  

Source: Dialogic estimates

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© COPYRIGHT  2012  DIALOGIC,  INC.    ALL  RIGHTS  RESERVED.          |          www.dialogic.com  


Mobile Experience  Management   Dialogic  has  world  class  soluJons  that  deliver  unparalleled   Mobile  Experience  Management     for  Content  Aggregators,  Service  Providers  and  Subscribers  

1 Mobile Video   Conferencing  

4

Voice   Data   Video  

Mobile Video   Gateway  

Mobile  Network  

VAS Services  

So`Switch SBC  

3

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© COPYRIGHT  2012  DIALOGIC,  INC.    ALL  RIGHTS  RESERVED.          |          www.dialogic.com  

Video/Content Quality  of   Experience  

2


Significant Market  Opportunity  for  2012   !    Dialogic  is  pursuing  markets  that  offer  significant  scale  and  strong  growth   Bandwidth   Op,miza,on   $842M   Session  Border   Controllers   $731M  

Market Opportunity  

Mobile Video   Conferencing/MRF   $185M  

2012: $2.39B   2015:  $2.95B  

VOIP/Mobile So`Switch   $624M   Source: Infonetics Service Provider VOIP Worldwide Q3 2011; Gartner VSCA Carrier Network Infrastructure Q411 Update; Dialogic estimates

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© COPYRIGHT  2012  DIALOGIC,  INC.    ALL  RIGHTS  RESERVED.          |          www.dialogic.com  

Video Quality   Of  Experience   $12M  


Solving Mobile  Challenges   !    Dialogic  Mobile  Experience  Management  delivers  unparalleled  opportuniJes  to    address  challenges  faced  by  Mobile  markets    

Mobile Challenges  

Dialogic Delivers  

! Compe,,on  drives  new  services;  higher  ARPU  

!  PowerMedia  so`ware  for  Mobile  VAS  

! Carriers  roll  out  video  calling  en  masse  

! PowerMedia  so`ware  for  Video  Conferencing  

! Subscribers  demand  higher  quality  video  

! VisionVideo  so`ware  –  Quality  of  Experience  

! Mul,media  session  demand  skyrockets  

! BorderNet  Family  of  SBCs  

! Mul,media  traffic  overwhelms  networks        

! i-­‐Gate  Session  Bandwidth  Op,miza,on  

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Mobile VAS  Services   !    3,000  ecosystem  partners  build  their  value  added  soluJons  on  Dialogic    

!   Leading  applicaJons  include  Video  Ringtones,  Video  IVRs  and  Video  Ad  InserJon   !    Many  soluJons  are  migraJng  from  premise-­‐based  to  the  Cloud  for  greater  reach  

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Mobile Video  Conferencing   !    PowerMedia  XMS  is  a  leading  sojware  media  server  for  carrier-­‐class  Video   !    Standards-­‐based,  IMS/LTE  compliant,  stellar  picture  (VGA  &  720p  capable)   !    Video  connecJvity  between  mobile  devices,  tablets,  PCs  and  set-­‐top  box   3G/LTE  Video  Conferencing  with  Live  Video  Sharing  

Walter

Bill

David 12  

Desktop SIP   Video  client    

Mike

© COPYRIGHT  2012  DIALOGIC,  INC.    ALL  RIGHTS  RESERVED.          |          www.dialogic.com  

Ryan

iPhone with   Dialogic  client  

Android Tablet  

PC with  Flash   browser  plug-­‐ in  


Mobile Video  Quality  of  Experience   !    Mobile  Video  quality  is  ojen  measured  a>er  a  poor  subscriber  experience   !    VisionVideo  sojware  assesses  perceptual  quality  at  key  points  in  the  value  chain   !    Significantly  impacts  video  quality  to  enhance  subscriber  saJsfacJon   VisionVideo  Quality  of  Experience  

Store

Content AdaptaJon  

M Cache  

VisionVideo Touch  Points   13  

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Video Server  

Mobile Network  


Service Provider  Solu,ons   !   BorderNet  SBCs  are  a  top  priority  with  our  installed  base  of  ControlSwitch  customers   !   Natural  extension  of  Dialogic  capabiliJes  to  the  border  for  Peering  and  Access   !   First  Video  transcoding  SBC  for  Access  markets  

Dialogic® BorderNet™  2020  SBC  

Dialogic® BorderNet™  4000  SBC  

Dialogic® BorderNet™  3000  SBC  

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Bandwidth Op,miza,on   !    Targeted  at  Mobile  and  VOIP  operators  seeking  capacity  and  performance  gains   !    OpJmizaJon  over  any  transport  –  Fiber,  Copper,  Microwave  or  Satellite   ! 2G,  3G,  LTE,  VOIP   ! Full  payback  ojen  in  as  few  as  3-­‐12  months    

!   The  DV  Series  should  deliver  up  to  40%  capacity  gains  without  sacrificing  quality  

2G 3G  

Voice &  Data   Traffic  

I-­‐Gate 4000   Mobile   Backhaul  

OpDmized 2G/3G/LTE  Payloads  

I-­‐Gate 4000   Mobile   Backhaul  

Trans

IP/MPLS and/or  TDM   Backhaul  Network  

Transport Agnos,c  –  Fiber,  Copper,  Microwave  or  Satellite   15  

3G RNC  

© COPYRIGHT  2012  DIALOGIC,  INC.    ALL  RIGHTS  RESERVED.          |          www.dialogic.com  

2G BSC  


Dialogic Strategy   Focus  on  penetraJng  growth  markets  with  Next-­‐Gen  products   Invest  for  innovaJon  in  soluJons  and  services   Up-­‐sell  and  cross-­‐sell  our  integrated  product  suite  to   our  global  customer  base   Capitalize  on  opportuniJes  in  Emerging  markets   Profitably  grow  revenue  

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Revenue Poten,al  

Global Customer  Experience  

!   23  of  the  25  top  global    Mobile  Carriers   !    Nearly  100  of  the  top    global  VOIP  Carriers  

!   Over  3,000  ecosystem  partners  

Business Evolu,on   17  

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Global Opera,ons  and  Support  

Moscow Maidenhead   Fordingbridge   Montreal  

Milpitas

Boston (2)   Parsippany  

Beijing

Paris

Ft. Lauderdale  

New Delhi   Petach-­‐Tikva  

Tokyo Dubai   Pune   Singapore  

Sao Paulo  

CORPORATE HEADQUARTERS   -­‐  Engineering   -­‐   Sales   -­‐   Service  and  Support  

ENGINEERING SERVICE  AND  SUPPORT   MAJOR  SALES  OFFICE   14  Addi,onal  WW   Sales  Offices  

Source: Company update as of 5/2012 18

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Financial Performance   !    Quarterly  revenue  conJnuing  to  head  in  a  posiJve  direcJon   !  Aggressive  shij  to  Next-­‐Gen  products  over  Legacy   Revenue  (GAAP)  for  Q1  11  –  Q4  11   $70

$60

$47

$45

$50

Legacy

$50

$56

$40

Next-­‐Gen

$30

$20

$10

$0 Q1 11

19

Q2 11

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Q3 11

Q4 11


Financial Performance   !  Dialogic  exceeded  most  of  its  peers  with  Gross  Margins  of  65.8%  in  Q4  2011   !  OperaJonal  iniJaJves  reduced  annualized  OpEx  by  $25M  between  Q1  and  Q4  of  2011   !  Ongoing  efforts  could  yield  another  $18-­‐20M  of  annualized  savings  by  Q4  2012   Gross  Margin  %  (non-­‐GAAP)  

Note: All  data  as  publicly  reported  on  a  non-­‐GAAP  basis   20  

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OperaJng Expense  (non-­‐GAAP)  


Financial Performance   !    Dialogic  has  strong  revenue  diversity  whether  by  Customer  or  Geography   Customer  Mix  for  FY  2011  

Revenue by  Geography  for  FY  2011   CALA 7%

Top 5 15%

Next 5 6%

Rest of   Customers 79%

APAC 19%

AMER 39%

EMEA 35%

   Approximately  28%  of  Total     Revenue  from  BRIC/MEA  Regions   Note:  All  data  presented  on  a  non-­‐GAAP  basis   21  

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Financial Performance   !   Restructured  balance  sheet  in  April  2012,  reducing  long-­‐term  debt  from   $97.9M  to  $59.9M  in  exchange  for  $39.5M  in  converJble  notes   !   ConverJble  notes,  upon  stockholder  approval,  will  convert  into  common   shares  and  increase  common  shares  outstanding  from  31.5M  to   approximately  71.5M   !   Interest  rate  on  the  new  long-­‐term  note  reduced  from  15%  to  10%   ! For  2012,  5%  is  cash  interest  and  5%  is  payment-­‐in-­‐kind  

!   Company expects  to  reduce  its  2012  quarterly  cash  interest  by  $2.6M  or   $10.6M  annually    

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Conclusions !   Mobile  Experience  Magers   !   Leveraging  25+  years  of  enabling  and  ensuring  Voice,  Video  and  Data   !   Next-­‐Gen  por^olio  well  posiJoned  for  high  growth  markets   !   Global  reach  to  capitalize  on  needs  in  Developed  and  Emerging  markets   !   Poised  to  deliver  strong  shareholder  returns  in  2012  

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Dialogic, Veraz,  Brooktrout    among  others  as  well  as  related  logos,  are  either  registered  trademarks  or  trademarks  of  Dialogic  Inc.  and  all  companies  controlling,  controlled   by,  or  under  common  control  with  Dialogic    Inc.  (“Dialogic”).  The  names  of  actual  companies  and  products  menJoned  herein  are  the  trademarks  of  their  respecJve  owners.     02/12  

www.dialogic.com

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