Marketing with Northland Capital Markets - March 2016 Germain Lamonde

1. Germain Lamonde
Chairman, President & CEO
March 30-31, 2016
MARKETING WITH NORTHLAND CAPITAL MARKETS

2. 2© 2016 EXFO Inc. All rights reserved.
Certain statements in this presentation, or given in response to your questions, may constitute
forward-looking statements within the meaning of the Securities Act of 1934. The Private
Securities Litigation Reform Act of 1995 provides “safe-harbors” for such forward-looking
statements and we intend that any forward-looking statements made today be subject to the
safe harbors. We caution you that any forward-looking statements are just predictions. They
are not guarantees of future performance and involve risks and uncertainties. Actual results
may differ materially from those projected in forward-looking statements and we invite you to
review the company’s most recent filings with the Securities and Exchange Commission or
Canadian securities commissions for a discussion of the factors at risk. These forward-looking
statements speak only as of the date of this presentation and, unless required by law or
applicable regulations, we will not be reviewing or updating the material that is contained
herein.
For a reconciliation of adjusted EBITDA to net earnings, refer to the Q2 2016 press release or
the “Non-IFRS Measures” section on EXFO’s website.
All amounts in millions of US dollars, except otherwise noted.
FORWARD-LOOKING STATEMENTS

3. 3© 2015 EXFO Inc. All rights reserved.
EXFO BY NUMBERS
IN PORTABLE
OPTICAL TESTING
LEADER
FY 2015 SALES OF $222.1 M
(GLOBAL NO.2 PLAYER)
SCALE
GEOGRAPHICAL SALES
FOR FY 2015
DIVERSIFIED
1500EMPLOYEES
IN 25 COUNTRIES
GLOBAL
OF TOTAL BOOKINGS
IN FY 2015
WIRELESS
30%
CASH RETURNED TO
SHAREHOLDERS VIA SHARE
REPURCHASE PLANS
SHAREHOLDER
VALUE

4. 4© 2016 EXFO Inc. All rights reserved.
- MULTI-TECHNOLOGY PLATFORMS
- WORLD NO. 1 IN OPTICAL TEST
- SIMPLIFICATION & AUTOMATION
LEADER IN PORTABLE TEST

5. 5© 2016 EXFO Inc. All rights reserved.
TESTFLOW: FIELD TEST AUTOMATION
› Drives efficiency of network operator processes;
M&P pushed out to platforms via Cloud
› Ensures compliancy, “right the first time,” test
consistency and test result integrity (no cheating)
› Test results automatically stored in EXFO│Xtract
› Ideal for FTTA, FTTH, small cell, DAS rollouts
› Runs on all FTB test platforms and modules

6. 6© 2016 EXFO Inc. All rights reserved..
LEADER IN SERVICE ASSURANCE
- FULL END-TO-END SOLUTION PORTFOLIO
- CONVERGED & VIRTUALIZED IP SERVICES
- OVER 100 DEPLOYMENTS WORLDWIDE

7. 7© 2016 EXFO Inc. All rights reserved..
ANALYTICS FOR E2E VISIBILITY
- CORRELATE NETWORK PERFORMANCE,
SERVICE DELIVERY & QUALITY OF EXPERIENCE
- MULTI-LAYER END-TO-END ANALYTICS
- PROVEN PERFORMANCE AT TIER-1 SCALE

8. 8© 2016 EXFO Inc. All rights reserved.
CONSUMER AND BUSINESS TRENDS
By 2021…
COMMUNICATION
SERVICES
VIDEO AUGMENTED
REALITY
CONNECTED
CARS
HEALTHCARE INTERNET
OF THINGS
MOBILITY ⎪ BROADBAND ⎪ CLOUD
Source: Ericsson Mobility Report, November 2015
›9.1B mobile subscribers
›7.7B mobile broadband subscribers
›28B connected devices
›10X mobile data traffic growth (from 2015)

9. 9© 2016 EXFO Inc. All rights reserved.
MAJOR OPPORTUNITIES FOR EXFO
FIELD
AUTOMATION
›Operational efficiency
›Deploy services faster
›Reduce time-to-
revenue
QoE + E2E
VISIBILITY
›QoE and retention
›Reduce service costs
›Prioritize and predict
›Simplify operations
FIBER
EVERYWHERE
›… rich in the core
›… deeper in access
›… to-the-home
›… to-the-antenna
High-Speed, NFV,
Cloud, Data Centers
›NFV + H/W co-exist
›Service complexity
›Operational cost
›QoE and retention
›World No.1 in portable test
›Consistent share gains
›Frost & Sullivan Market
Leadership Award for 2015
›Major new offerings
›EXFO Connect penetration
›iOLM, FIP, etc.
›TestFlow™ process
automation
›Wins at tier-1 MNO …
more to come
›Active/Passive + analytics
›Both NFV + HW-centric
›NFV driving active SA
›Xtract: Major wins & funnel
›NFV ready for deployment
›100G+ growth (labs & field)
›Web-scale + data centers
›Driving active/analytics
opportunities
RELEVANCE TO EXFO

10. 10© 2016 EXFO Inc. All rights reserved.
GROWTH STRATEGY
TOP-LINE DRIVEN: BOLSTER SALES AND GROSS MARGIN
TRANSFORM
Into a solutions partner. Customers
seeking E2E solutions to enhance
network performance and service
experience quality.
EXPAND
Share of wallet with tier-1 network
operators. Top-15 operators account
for lion’s share of capital spending.
ACCELERATE
Penetration of data center, Cloud
and web-scale operator markets.
Web-scale operators spending at a
faster rate than network operators.
INCREASE
Wireless presence. Bookings to
wireless customers reached 30-32%
of total bookings in FY 2015.

11. 11© 2016 EXFO Inc. All rights reserved.
PROFITABILITY TARGET
1 Adjusted EBITDA represents net earnings before interest, income taxes, depreciation and
amortization, stock-based compensation costs and foreign exchange gain or loss.
REDUCED OPEX FROM
RESTRUCTURING AND
CURRENCY TRENDS
$3.5M
RICHER PRODUCT MIX
ADJUSTED EBITDA1
>40% Growth YoY
$20M
FY 2016
REQUIRES ~3% YoY
REVENUE GROWTH
GOOD START IN H1/16.
ADJ. EBITDA TYPICALLY
STRONGER IN H2.
$10.6M

12. 12© 2016 EXFO Inc. All rights reserved.
PROTOCOL
(Wireless, T&D, SA, Analytics)
PHYSICAL
(Optical & Access)
TELECOM MARKET
TAM
SAM
Major competitors
Market growth rate
Sales ― FY 2015
Gross margin profile
$815 M
$495 M
Viavi, Anritsu
0-5%
$144.1 M
55-60%
$4.3 B
$2.4 B
Viavi, IXIA,
Netscout
10-15%
$80.6 M
70-75%
PROTOCOL TO DRIVE REVENUE AND EARNINGS GROWTH
*Excludes losses on FX contracts.
$5.1 B
$2.9 B
Single-digit
$224.7 M*
63%-65%
TOTAL

13. 13© 2016 EXFO Inc. All rights reserved.
PHYSICAL-LAYER SOLUTIONS
COPPER ACCESS
› Most advanced product portfolio for
high-speed copper links
› MaxTester secured contract wins
with several tier-1 operators
› Supports pair bonding, vectoring
and G.fast (up to 1 Gbit/s)
PORTABLE OPTICAL
› No. 1 player with >34% market share
› Market dominance in OTDR testing
› Key differentiator: iOLM software
› Market leader in dispersion testing
› Unmatched product breadth & depth

14. 14© 2016 EXFO Inc. All rights reserved.
PROTOCOL-LAYER SOLUTIONS
SERVICE ASSURANCE &
ANALYTICS SOFTWARE
› Probe-based systems targeted at
medium to large network operators
› E2E solutions with fully integrated
active/passive monitoring and
infrastructure polling to assure SLAs
› Real-time analytics for unmatched
network performance and service
experience visibility
TRANSPORT AND DATACOM
› Multi-service analyzers for
SONET/SDH, OTN and Ethernet
rates from 10M to 100G
› Comprehensive portfolio for wireless
backhaul and fronthaul
› Pioneered new standard for Ethernet
testing (EtherSam)
WIRELESS
› Network simulators: Large-scale
emulation of IMS, WebRTC
subscriber sessions to test routers,
gateways and session border
controllers

15. 15© 2016 EXFO Inc. All rights reserved.
Q2 2016 HIGHLIGHTS
› Sales increased 5.1% YoY to $53.6 M
› Bookings improved 9.2% YoY to $59.7 M, B/B ratio of 1.11
› Gross margin1
reached 64.7%, highest level in 4 years
› Adjusted EBITDA2 amounted to $5.3 M, 9.9% of sales
› Cash flows from operating activities totaled $15.3 M
› Cash position attained $44.4 M and no debt
1Gross margin before depreciation and amortization is a non-IFRS measure and represents sales less cost of sales, excluding depreciation
and amortization.
2Adjusted EBITDA represents net earnings before interest, income taxes, depreciation and amortization, stock-based compensation costs
and foreign exchange gain.

16. 16© 2016 EXFO Inc. All rights reserved.
ANNUAL FINANCIAL RESULTS
1
(in US$ millions, except gross margin)
1 All financial results from continuing operations, except net earnings/loss and adjusted EBITDA.
2 Gross margin before depreciation and amortization is a non-IFRS financial measure and represents sales less cost of sales, excluding depreciation and amortization.
3 Adjusted EBITDA represents net earnings (loss) before interest, income taxes, depreciation and amortization, restructuring charges, stock-based compensation costs,
changes in the fair value of the cash contingent consideration, gain from the disposal of discontinued operations and foreign exchange gain or loss.
Sales
Gross Margin2
Net R&D Expenses Adjusted EBITDA3
Net Earnings/LossSG&A Expenses

17. 17© 2016 EXFO Inc. All rights reserved.
STRONG VALUE PROPOSITION
WHY INVEST?
1.History of market-share gains
Captured market share in growth and downward markets
2.Well positioned for key growth drivers
3G, 4G/LTE, wireless backhaul, small cells, DAS, RRH, FTTx, 100G
3.Balancing sales growth and profitability
Targeting Adj. EBITDA of $20 M at a revenue level of about $230 M for FY 2016
4.Solid balance sheet
Cash position of $44.4 M and no debt — as at Feb. 29, 2016
5.Experienced and disciplined management team
Averaging >15 years of experience in sales, marketing, R&D, manufacturing, finance, HR
1Adjusted EBITDA represents net earnings before interest, income taxes, depreciation and amortization, stock-based compensation costs and foreign exchange gain or loss.