1

Reference Slides Earnings Call for Q2-15 Results

2 July 15

Safe Harbor Provision

Forward-looking statements in the conference call involve a number of risks and uncertainties, including but not limited to product demand, pricing, market acceptance, changing economic conditions, product technology development, the effect of the company’s accounting policies, and other risk factors detailed in the company’s SEC filings. The Company does not undertake to update forward-looking statements. In this conference call, management will be referring to certain non-GAAP financial measures, which are provided to enhance the user's overall understanding of the company’s financial performance. By excluding certain non-cash charges, non-GAAP results provide information that is useful in assessing RADCOM's core operating performance, and in evaluating and comparing our results of operations on a consistent basis from period to period. The presentation of this additional information is not meant to be considered a substitute for the corresponding financial measures prepared in accordance with generally accepted accounting principles. Investors are encouraged to review the reconciliations of GAAP to non-GAAP financial measures which are included in the quarter’s earnings release.

3 July 15

Highlights

Q2-15 H1-15

Revenue $4.8M $11.2M

Gross margin 75% 79%

Net profit (non-GAAP) $605K $1.4M

Net margin (non-GAAP) 12.5% 12.7%

Cash balance $9.9M $9.9M

EPS (basic Non-GAAP) $0.07 $0.17

4

Top-Tier NFV Adoption Begins

• AT&T: plans to virtualize and control more than

75% of its network using software-driven architecture by 2020

• Telefonica: UNICA network infrastructure

initiative to virtualize >30% of its network by 2016

• Telstra: planning to introduce SDN and NFV

capabilities into its core network

• Verizon: plans to incorporate commodity

hardware and many non-traditional vendors

5

A Huge, Fast-Growing Market

Infonetics, Nov 2014:

“We are projecting the global service provider SDN and NFV market to reach $11 billion in 2018…Software applications will take more than 90% of it…”

Research & Markets, Feb 2015:

“It is estimated that the overall global market for NFV will grow at a CAGR of 83.1% between 2015 and 2020. NFV revenues will reach $8.7 billion by the end of 2020.”

Technavio:

“The Global NFV market is expected to grow at a whopping CAGR of 51.57% for the 2013-2018 period.”

6

Financials

7 July 15

Revenues: Q2 & H1 (US $ 000’S)

3,030

4,573 4,758 5,471

6,007 6,354

5,152

5,443 5,707

4,970

7,188

4,837

H2 2012 H1 2013 H2 2013 H1 2014 H2 2014 H1 2015

8,182

10,016 10,465 10,441

13,195

11,191

- Q1

- Q2

8 July 15

Gross margin

56.5%

67.3%

74.8%

74.9%

Q2/12 Q2/13 Q2/14 Q2/15

9 July 15

Operating Expenses (Non GAAP, US $ 000’S)

Q2-15 Q2-14 H1-15 H1-14

R&D, gross 1,274 1,462 2,746 2,984

Less participation 148 289 148 587

R&D, net 1,126 1,173 2,599 2,397

Sales & marketing 1,413 1,720 3,363 3,617

General & administration 468 519 991 1,059

Total operating expenses 3,007 3,412 6,952 7,073

10 July 15

Q2 Operating Income (Non GAAP, US $ 000’S)

(1,707)

227 309

627

(2,000)

(1,500)

(1,000)

(500)

-

500

1,000

Q2/12 Q2/13 Q2/14 Q2/15

11 July 15

H1 Operating Income (Non GAAP, US $ 000’S)

-633 -497 -1,063

42

1,085 1,280

-1,707

227 203

156

2,255

627

-2,500

-2,000

-1,500

-1,000

-500

-

500

1,000

1,500

2,000

2,500

3,000

3,500

H2 2012 H1 2013 H2 2013 H1 2014 H2 2014 H1 2015

-2,340 -270 -860

198

3,340

1,907

H2 2012 H1 2013 H2 2013 H1 2014 H2 2014 H1 2015

- Q1

- Q2

12 July 15

Exchange Rate: Brazilian Real vs US Dollar B

razi

lian

Rea

l Exc

han

ge

Rat

e fo

r 1

US

do

llar

20% (3)%

2.66

3.2 3.11

0

0.5

1

1.5

2

2.5

3

3.5

31/12/14 31/03/15 30/6/15

13 July 15

Q2 Net Income (Non GAAP, US $ 000’S)

(1,715)

419 360

605

(2,000)

(1,500)

(1,000)

(500)

-

500

1,000

Q2/12 Q2/13 Q2/14 Q2/15

14

-1,684

-512

-1,148

248

872 821

-58

419 187

360

1,795

605

-2,000

-1,500

-1,000

-500

-

500

1,000

1,500

2,000

2,500

July 15

H1 Net Income (Non GAAP, US $ 000’S)

-1,742

-93 -961

608

2,667

1,426

H2 2012 H1 2013 H2 2013 H1 2014 H2 2014 H1 2015

- Q1

- Q2

15 July 15

Income Statement (Non-GAAP, US$ 000’s)

Q2-15 Q2-14 H1-15 H1-14

Sales 4,837 4,970 11,191 10,441

Cost of sales 1,203 1,249 2,332 3,017

Gross Profit 3,634 3,721 8,859 7,424

Gross margin 75% 75% 79.2% 71.1%

R&D, gross 1,274 1,462 2,747 2,984

Less participation 148 289 148 587

R&D, net 1,126 1,173 2,599 2,397

Sales & marketing 1,413 1,720 3,363 3,617

General & administration 468 519 990 1,059

Operating expenses 3,007 3,412 6,952 7,073

Operating profit 627 309 1,907 351

Financial income (expense) 78 51 (374) 257

Net profit 705 360 1,533 608

Net taxes (100) 0 (107) -

Net profit 605 360 1,426 608

EPS (basic) $0.07 $0.04 $0.08

EPS (diluted) $0.07 $0.04 $0.07

16 July 15

Balance Sheet (US$ 000’s)

30 Jun 15 31 Dec 14 Cash and deposits 9,916 6,880

Trade receivables 3,434 5,477

Inventories 1,482 2,699 Other receivables 1,569 1,411

Current assets 16,401 16,467

Assets for severance benefits 3,163 3,051 Other long-term receivables 622 600 Property & equipment, net 210 200

Total assets 20,396 20,318

Trade payables 424 1,524 Current deferred revenues and advances from customers 842 765

Other payables 3,638 4,116

Current liabilities 4,904 6,405 Long-term deferred revenues 384 198

Liability for employees 3,636 3,453

Equity 11,472 10,262

Total liabilities & equity 20,396 20,318

US$ ‘000s

17

$16.51 $17.44

$15.86 $15.67 $16.46 $16.40

$11.32

$9.16 $8.10

$6.36 $6.41

$4.90 $4.00

$6.00

$8.00

$10.00

$12.00

$14.00

$16.00

$18.00

$20.00

H2-12 H1-13 H2-13 H1-14 H2-14 H1-15

Current assets Current Liabilities

July 15

Current Assets vs. Current Liabilities

146% 190%

196% 246% 266%

347%

18 July 15

Equity to Total Assets

37%

26% 25% 23%

39% 40% 38% 42%

44% 48%

51% 54%

56%

0%

10%

20%

30%

40%

50%

60%

Q2

-12

Q3

-12

Q4

-12

Q1

-13

Q2

-13

Q3

-13

Q4

-13

Q1

-14

Q2

-14

Q3

-14

Q4

-14

Q1

-15

Q2

-15

19

Thank You

July 15

20

Additional Slides About NFV Market

21

“NFV is the new tsunami transforming

the communications industry”

Dr. Eyal Felstaine VP Products, Amdocs

The Potential

22 July 15

Trending Towards NFV

“The issue is simple: the traffic can’t be managed efficiently with technology that defined the telecom

network until now.

The solution for managing this growth without straining the network

boils down to shifting network control from hardware to software.”

John Donovan, Senior Executive VP AT&T Technology & Operations

23

Top-Tier Adoption Begins, cont.

“AT&T's increasing ability to adjust network equipment using software will mean that

business customers can get a new service in just a couple of days, instead of 2-3 months.

Other services, such as increasing bandwidth for customers, will take minutes as opposed to

30-45 days.”

John Donovan, Senior Executive VP of AT&T Architecture, Technology & Operations

24

New Access for Small Players

“If there's one lesson to be learned from the move to IP, it's that technology disruption

changes the competitive landscape. And that will happen again with NFV…

There are signs of a surge in NFV-based service creativity.”

Ray Le Maistre, Light Reading, May 2015