SMTP Inc. Investor Presentation

1. SMTP, Inc.
(OTCQB: SMTP)
Delivering growth and dividends
SMTP Inc. | www.smtp.com | OTCQB: SMTP
October 2013 | Page 1

2. Safe Harbor Statement
The information posted in this release may contain forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. You can identify these statements by use of the
words "may," "will," "should," "plans," "explores," "expects,"
"anticipates," "continues," "estimates," "projects," "intends," and
similar expressions. Forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially from
those projected or anticipated. These risks and uncertainties include,
but are not limited to, general economic and business conditions,
effects of continued geopolitical unrest and regional conflicts,
competition, changes in technology and methods of marketing,
delays in completing new customer offerings, changes in customer
order patterns, changes in customer offering mix, continued success
in technological advances and delivering technological innovations,
delays due to issues with outsourced service providers, and various
other factors beyond the Company's control.
SMTP Inc. | www.smtp.com | OTCQB: SMTP
October 2013 | Page 2

3. Overview
SMTP has provided cloud-based email delivery solutions for
over a decade, with a strong history of profitable growth.
Revenues (TTM)
$5.5M
Sales Model
Cloud-based subscription business for over 10 years, with
thousands of customers (and no customer >2% sales)
Global Sales Reach
Roughly 50% of sales are outside the U.S.
(SMTP serves over 130 countries)
Footprint
Headquartered in U.S., with the majority of technical
development and service based in the Ukraine
Dividends
History of steady dividends (current yield ~ 8%), along
with a track record of profitable growth
Returns(TTM)
ROA 94% and ROE 164%
SMTP Inc. | www.smtp.com | OTCQB: SMTP
October 2013 | Page 3

4. SMTP Facts & Figures
SMTP, Inc. (SMTP) – OTC QB
Financial Highlights (ttm)
Stock Highlights (as of 10/11/13)
Revenue
$5.5M
Price
EBITDA
$2.0M
Market Cap
$16.0M
Net Income
$1.2M
Trailing P/E
13.25
Profit Margin
22%
EV/EBITDA
7.86
Operating Margin
35%
Shares Outstanding
Total Cash
$0.9M
Total Debt
-
Return on Assets
94%
Return on Equity
164%
1.06
15.09M
Float
1.75M
Avg. Vol. (3 mo)
14,449
Diluted EPS
0.08
Dividend Yield
(trailing annual)
7.1%
Source: CapitalIQ
SMTP Inc. | www.smtp.com | OTCQB: SMTP
October 2013 | Page 4

5. Customer Solutions
Internet Service Providers (ISP’s) have put in place a wide
variety of sophisticated filters to stop SPAM.
But as a result, legitimate companies face real problems
sending large volumes of email:
•
•
•
Bounces
Complaints
Blacklisting
One of the primary factors considered by ISP’s in evaluating
emails is the reputation of the sending server.
SMTP’s trusted servers, our 10 years of cloud-based
experience, and our proactive monitoring allow us to get our
client’s email to the inbox, resulting in loyal customers and a
stable, recurrent-revenue base.
SMTP Inc. | www.smtp.com | OTCQB: SMTP
October 2013 | Page 5

6. How we work
Customers send us emails for distribution
Our trusted servers relay the emails
to consumer inboxes, while we
manage issues of deliverability,
bounces and blacklisting with ISP’s.
A Return Path study found that 83% of deliverability issues are caused by sender
reputation. Our delivery services can boost customers inbox delivery by 10-20%.
SMTP Inc. | www.smtp.com | OTCQB: SMTP
October 2013 | Page 6

7. Points of Differentiation
Growing businesses sending opt-in emails can experience delivery
losses of 20-30% if they try to send their emails themselves.
Small businesses may use do-it-yourself email platforms like Constant
Contact, which tend to focus on content creation. But as they scale
up, businesses typically run into three problems:
1. High costs for delivery of large volumes
2. Increasing concerns with bounces and complaints
3. Limited support for issues related to email delivery
SMTP’s customers care deeply about ensuring their e-mail reaches the
intended recipient and often require extensive service and support.
SMTP Inc. | www.smtp.com | OTCQB: SMTP
October 2013 | Page 7

8. Market Opportunity
Email Marketing is a rapidly-growing $2B industry.
SMTP focuses on the email delivery the largest and fastest
growing segment of the market.
We will benefit from leveraging our position in delivery by
adding related services for clients.
SMTP Inc. | www.smtp.com | OTCQB: SMTP
October 2013 | Page 8

9. Key Company Assets
Market Reputation
 A brand name synonymous with email itself
(SMTP stands for Simple Mail Transfer Protocol, the protocol used for all email)
 Large and well-established recurrent-revenue client base
 Excellent reputation for service and customer support
Proprietary Company Capabilities
 Over a decade of cloud-based email delivery experience
 Robust technical infrastructure (billions of emails sent)
 Pool of IP addresses trusted by Internet Service Providers
 Highly capable, cost-effective 24x7 global service team providing strong
English & multi-lingual support, along with deep technical experience
SMTP Inc. | www.smtp.com | OTCQB: SMTP
October 2013 | Page 9

10. Competitive Landscape
Segment
Marketing
Email Creation
Marketing
Email Delivery
Transactional
Email Delivery
Constant Contact
MailChimp
Campaigner
SMTP
TurboSMTP
SendGrid
Amazon
Dyn
Primary
Focus
Focus on Ease of Creating
Attractive Emails
Focus on Deliverability
and Customer Service
Focus on API’s
Customer
Relations
Graphical interfaces for
numerous small senders
High level of client
interaction and support
Example
Companies
(Application
Programming Interfaces)
Highly automated with
minimal interaction
SMTP excels in customer service for deliverability issues, with a costeffective multi-lingual service organization providing global support.
This team has been in place for over a decade, and is one of the
largest teams in the industry exclusively focused on deliverability.
SMTP Inc. | www.smtp.com | OTCQB: SMTP
October 2013 | Page 10

11. Profitable Base for Growth
History of Revenue Growth
 Strong revenue growth
 Consistent earnings growth
 Margins healthier than for
other players in the industry
5,353
6,000
4,279
5,000
4,000
2,736
3,000
2,000
1,000
(E.g. Constant Contact is at <5%)
805
1,549
0
2008
2009
20102
2011
2012
2008
2009
2010
2011
2012
1Q 2013
2Q 2013
$805
$1,549
$2,736
$4,279
$5,353
$1,370
$1,395
93%
77%
56%
25%
$628
$1,131
$2,097
$3,456
$4,076
$1,048
$1,092
78%
73%
77%
81%
76%
77%
78%
Operating Income
($196)
$109
$742
$1,576
$1,714
$375
$577
Operating Margin
-24%
7%
27%
37%
32%
27%
41%
Net Revenue
Growth %
Gross Profit
Gross Margin
SMTP Inc. | www.smtp.com | OTCQB: SMTP
2%
October 2013 | Page 11

12. Growth, with dividends
SMTP’s goal is to provide investors with strong risk-adjusted returns.
The company has an established history of profitable operation, with
a proven, subscription-based revenue model.
SMTP is debt-free and has minimal concentration of risk in any
customer (largest customer is less than 2% of revenues).
Our practice has been to return 80-90% of cash flow from operations
to investors via healthy dividends every quarter, with such payments
reduced by any expected cost increases in the coming quarter.
SMTP Inc. | www.smtp.com | OTCQB: SMTP
October 2013 | Page 12

13. The Opportunity
SMTP has three clear opportunities to drive significant growth:
 Quantitative Marketing, leveraging a team
with a strong record for rapidly driving results,
and with a clear focus on specific verticals
 International Growth, driven by localizing
sales & marketing for high-growth regions
 Launching new products & features,
including integrated solutions that open up
significant opportunities for new customers.
These initiatives represent modest investments to strengthen our
core team and product offering. In addition, the company will revisit
strategic options, such as channel partnerships and/or potential
acquisitions of affordable firms with a complementary position.
SMTP Inc. | www.smtp.com | OTCQB: SMTP
October 2013 | Page 13

14. Quantitative Marketing
SMTP’s growth has historically been a function of its internationally
recognized brand and its reputation for stellar customer service.
The company has recently strengthened its team and is pursuing
focused efforts in quantitative marketing, including:
 Deeply analytical market segmentation
 Targeted messaging for key segments
 Cost-effective lead acquisition
 Optimized online lead conversion
 Quantitative lead ranking for inside sales prioritization
The team has a track record in prior firms of having rapidly reduced
customer acquisition costs and driven significant revenue growth.
SMTP Inc. | www.smtp.com | OTCQB: SMTP
October 2013 | Page 14

15. International Growth
SMTP’s brand is already globally recognized, due to the universal
adoption worldwide of the Simple Mail Transfer Protocol.
The company is well positioned for global expansion:
 Active customers in over 130 countries
 50% of sales sourced internationally
 Multilingual 24x7 service team
The company’s plans include:
 Localizing web content regionally
 Emphasizing support in the local tongue
 Providing dedicated support for key global accounts
SMTP Inc. | www.smtp.com | OTCQB: SMTP
October 2013 | Page 15

16. Product Roadmap
Our vision is to provide an integrated suite of solutions, leveraging
our robust delivery capabilities to deliver compelling business value
Original Capabilities
 Core deliverability
Added Capabilities
 PreviewMyEmail
 Email Marketer (paid editor)
Potential Enhancements
 Campaign Management
 Analytics Portal
 Customer API’s
 Campaign Optimization
 Professional Services
These solutions open a range of new market opportunities, including:
• High-volume senders currently utilizing more costly integrated platforms,
such as Constant Contact and MailChimp
• Clients requiring sophisticated integration via API’s
• Customers requiring improved analytics for campaign visibility
SMTP Inc. | www.smtp.com | OTCQB: SMTP
October 2013 | Page 16

17. Criteria for Acquisitions
SMTP will continue to explore opportunities for strategic acquisitions,
meeting the following criteria:
 Providing a complementary technology or service
 Providing direct access to a new customer base
 Providing a distinct channel to a market
 Accretive to earnings and business value
 Well-understood integration path
 Affordably priced
SMTP Inc. | www.smtp.com | OTCQB: SMTP
October 2013 | Page 17

18. Leadership Team
Decades of cloud based email delivery experience.
A track record of strong and profitable growth.
Jonathan Strimling
Chief Executive Officer
Paul Parisi
Vice President of Innovation
Ruslan Bondarev
Chief Technology Officer
• 20 years of experience as an executive
and as an entrepreneur focused on
technology commercialization
• Over 25 years of senior technical work in
software and systems development
• Unusual blend of technical skills with
customer-focused business experience
• Former CTO of HealthConnected/Cloud
Industries Health, LocalGinger
• Robust portfolio of issued and pending
patents covering various IT systems
• Over 10 years of experience in the cloudbased delivery of email services
• Expert in email protocols and data
exchange, with deep technical
experience across a wide variety of
relevant systems/technologies
• Passionate about solving complex tasks
and delivery challenges
• Track record of driving strong growth,
including achieving nearly 400% growth
annually for two consecutive years
Yvonne Gaudette
Vice President of Marketing
Max Ilin
Vice President of Cust. Service
• Drove prior firm to achieve 98%
customer satisfaction ratings and a BBB
“perfect record” award
• 20 years of experience in marketing and
as a communications executive from VCbacked startups to Fortune 500 firms.
• Former Director of Marketing for
RatePoint, Vivox, and other ventures
• Track record of driving highly successful
product launches and rapidly and
inexpensively acquiring new customers.
• Over 5 years of experience in providing
support for cloud based email delivery
• Created highly-responsive and customerservice oriented 24x7 support center
• Strong technical experience with both
email delivery and supporting systems
• Former CEO of US Dynamics, American
Biomass Corporation/ WoodPellets.com,
and other ventures.
• Prior senior operating roles with
American Industrial Partners and GE
• Direct prior experience as an online
retailer with cloud based email services
• Dual Masters degrees in Management
and Engineering from M.I.T.
SMTP Inc. | www.smtp.com | OTCQB: SMTP
October 2013 | Page 18

19. Governance
SMTP Board of Directors brings
extensive experience in technology.
Experienced
auditors & counsel.
Semyon Dukach
Chairman
Rens Troost
Director
McConnell Jones Lanier & Murphy
Auditors
• Acquired controlling stake in SMTP Inc.
in 2002, and grew steadily and
profitably, taking public in 2011
• Chief Executive Officer at Virtual Clarity,
a firm focused on helping enterprises
virtualize their entire IT infrastructure
• Former Executive Director, Head of Core
Technology Architecture at UBS, AG and
Founder and Former CTO of Name, Inc.
• Expert in cloud computing, IT
infrastructure, and business strategy
• SEC Services Group focused on serving
publicly traded midsize and emerging
growth companies with SEC compliance
• Experience with over 100 SEC
registrants, supported by partners with
former “Big Four” accounting experience
• Broader business experience from a
range of consulting and advisory roles
Vadim Yasinowsky
Director
David M. Bovi, PA
Attorney
• Chief Executive Officer at PDFFiller.com,
a rapidly growing, cloud-based provider
of document completion services
• Former CTO at FurnitureFan.com and
prior founder of ClearWeb.com
• Veteran of technology development and
deeply experienced with the effective
marketing of software products
• 20 years of transactional corporate and
securities law experience
• Experience across a range of public and
private capital raising transactions, M&A,
and general corporate business.
• Masters Degree in Securities Regulation,
Georgetown University Law Center
• Set precedent for a steady flow of
dividends from SMTP in 2012
• Cofounded Fast Engines, Vert, Global
Cycle Solutions, PDFFiller and East of Air
• Prolific angel investor, with investments
in over 60 firms across a range of
industries and technologies
• Wide ranging business experience across
a range of ventures and technology
• Deep technical experience, including
developing an early internet payment
protocol in 1991 at MIT
• MS in Computer Science from MIT;
BS in Computer Science from Columbia
SMTP Inc. | www.smtp.com | OTCQB: SMTP
October 2013 | Page 19

20. Outstanding Performance
SMTP’s performance compares quite favorably within the industry1
Revenues
(TTM)
Net Income
(TTM)
Profit
Margins
(TTM)
Quarterly
Earnings
Growth
(yoy)
Return on
Assets
(TTM)
Return on
Equity
(TTM)
Enterprise
Value /
EBITDA
(TTM)
Constant Contact
269M
12.6M
4.7%
N/A
0.5%
6%
30.72
Responsys
183M
5.37M
2.9%
N/A
2%
3%
42.73
5.52M
1.24M
22.4%
60%
94%
164%
7.9
SMTP
SMTP leverages its SMTP brand, its cost-effective operations, and its
proven team to deliver outstanding financial returns.
Furthermore, the stock remains modestly priced, relative to others in
the industry, even before factoring in earnings growth trends.
1 Figures on all
firms based on TTM through Q2 2013; EV/EBITDA ratios as of 10/12/2013 (Data from CapitalIQ)
SMTP Inc. | www.smtp.com | OTCQB: SMTP
October 2013 | Page 20

21. Further Information
Alena Chuprakova
SMTP, Inc.
877-705-9362
alena@smtp.com
http://www.smtp.com
Paul Kuntz
RedChip Companies, Inc.
Tel: +1-800-733-2447, ext. 105
info@redchip.com
http://www.redchip.com
SMTP Inc. | www.smtp.com | OTCQB: SMTP
October 2013 | Page 21