Needham Interconnect Conference - Actua...Digital communications and marketing platform that enables...

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© 2015 Actua Corporation / All Rights Reserved / 1 Needham Interconnect Conference August 4, 2015

Transcript of Needham Interconnect Conference - Actua...Digital communications and marketing platform that enables...

Page 1: Needham Interconnect Conference - Actua...Digital communications and marketing platform that enables public sector organizations to effectively reach citizens and drive action Important

© 2015 Actua Corporation / All Rights Reserved / 1

Needham Interconnect Conference

August 4, 2015

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© 2015 Actua Corporation / All Rights Reserved / 2

Forward-Looking Statements

The statements contained in this presentation that are not historical facts are forward-looking statements that

involve certain risks and uncertainties, including, but not limited to, risks associated with the effect of economic

conditions generally, capital spending by our customers, our ability to retain existing customer relationships and

secure new ones, our ability to compete successfully against alternative solutions, our ability to timely and

effectively respond to technological developments, our ability to retain key personnel, our ability to have continued

access to capital and to deploy capital effectively and on acceptable terms, our ability to maximize value in

connection with divestitures, and other risks and uncertainties detailed in Actua’s filings with the Securities and

Exchange Commission. Those and other factors may cause actual results to differ materially from those projected.

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Non-GAAP Financial Measures

Non-GAAP net income (loss) and non-GAAP net income (loss) per diluted share are non-GAAP financial measures and have no

standardized measurement prescribed by GAAP. When referring to non-GAAP financial measures, the term “adjusted” is used

interchangeably with the term “non-GAAP” by Actua’s management and the two have identical definitions. Non-GAAP net income (loss) is

GAAP net income (loss) attributable to Actua, including acquired businesses’ deferred revenue and excluding share-based compensation,

amortization of intangibles, impairment-related and other costs, transaction expenses, other (income) loss, net, equity loss current non-

cash income tax benefit on discrete item and loss (income) from discontinued operations. Non-GAAP net income (loss) per diluted share is

non-GAAP net income (loss) divided by (1) GAAP shares, including the any impact of incremental dilutive securities (in the case of income)

or (2) GAAP shares, excluding any impact of incremental dilutive securities (in the case of loss). Actua's consolidated businesses are

BOLT, FolioDynamix, GovDelivery and MSDSonline as of March 31, 2015. Please note the following:

• FolioDynamix became a consolidated business on November 3, 2014 and, therefore, will be included in Actua’s consolidated results

beginning on November 1, 2014. The results of FolioDynamix for the first two days of November 2014 were insignificant for

consolidation purposes.

• Channel Intelligence, Investor Force and Procurian were sold in Q1, Q1 and Q4 2013, respectively, and are presented as

discontinued operations under GAAP. Receipt of respective escrow releases occurred throughout 2014 and is presented within our

non-GAAP measures as “Loss (income) from discontinued operations.”

Actua's management believes these non-GAAP financial measures provide useful information to investors and potential investors that

enables them to view Actua’s business in a similar manner as Actua's management and provide meaningful supplemental information

regarding Actua’s operating results as they exclude amounts that Actua excludes as part of its monitoring of operating results and

assessment of the performance of its business.

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Overview

BRINGING THE POWER OF THE CLOUD TO INDUSTRY-SPECIFIC VERTICAL MARKETS

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Overview

• Multi-vertical cloud software platform

• Operate cloud software solutions in four sectors:

– Government Communications

– Environmental Health and Safety

– Wealth Management

– Property and Casualty Insurance

• Total addressable market = multi-billion dollar opportunity

• Leader in each market, and each market is at early stage of cloud

adoption

• Investing for growth with emphasis on sales and marketing, product

development and tuck-in acquisitions

• Management team has been at the forefront of building technology

companies through every phase of technology over the last 30 years, with

a focus on SaaS since 1996

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Evolution of Cloud Computing Space

Emergence of SaaS

• Data and functionality moved to the

cloud

• Business comfortable with the model

• Faster ramp, lower TCO, pay for

what you use

• Rapid product evolution

• Dozens of examples of horizontal

cloud companies: Salesforce, Concur,

NetSuite, etc.

Vertical SaaS

• Deep industry solutions with

significant leverage

• More capital efficient

• Attractive competitive moats

• Few new market entrants

• Sticky customer relationships

• Automating areas outside the

enterprise

1ST WAVE 2ND WAVE

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Actua Platform Advantage: the Intersection of Vertical IP and SaaS IP

Being part of the Actua Platform provides:

• Public company advantage –strong balance sheet provides solid foundation and stability

• Accelerated market share and adoption

• Almost 1,000 experts in industry-specific vertical SaaS

• A core team with deep expertise in building technology companies by fueling growth, operating leverage

• Faster innovation cycles

• Ability to attract, grow and retain talent

SaaS IP

Ve

rtica

l IP

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Actua Market Characteristics

Attractive Market Size & Growth Opportunities> $ Billion + market, growing >20%

Pursuing markets we can transform

Highly fragmented, unautomated, slow to innovate

Early Cloud AdoptionProven customers, yet < 10% total market penetration

Attractive Competitive Dynamics

Clear competitive moat via big data and network effect

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Insurance Market

GovernmentCommunications

Market

Environmental, Health and Safety Market

> $20BILLIONTotal Addressable

Market

Actua’s Verticals

Wealth Management

Market

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$59.2

$84.8

$20.0

$50.0

$80.0

$110.0

$140.0

2013 Actual 2014 Actual 2015 Guidance

Revenue Growth

2015 Guidance

Range:

$133.0M - $138.0M

Fig

ure

s s

how

n in

mill

ions

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Cash Flow From Operations

$(18.0)

$(14.2)

($20.0)

($15.0)

($10.0)

($5.0)

$0.0

2013 Actual 2014 Actual

2015 Guidance Range:

Revised:$(5.0)M - $(9.0)M

Original:$(6.0)M - $(10.0)M

2015 Guidance

Fig

ure

s s

how

n in

mill

ions

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2013

Financial Profile

Gross Margins %

Sales and Marketing %

General and Administrative %

%s determined excluding stock-based compensation and deferred revenue adjustments from purchase accounting

Q1 2015

72%

45%

32%

2014

69%

37%

27%

Retention Rates %

Recurring Revenue %

97%

87% 87%

97%

Research and Development %

71%

46%

41%

15%

87%

95%

17% 23%

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Investment Highlights

• Large market opportunity

• Clear market leader in each vertical market

• Strong recurring revenue base

• Demonstrated record of outstanding revenue growth

• Proven track record of successfully entering and scaling cloud-ready

markets

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Appendix

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The Power of the Bolt Platform to Transform Insurance

Customer RelationshipsAlways say ‘yes’ to customers and meet all

their needs with the Bolt Platform

DistributionLeverage new distribution channels with the

Bolt Platform to reach more customers

• Broader distribution brings Insurers new customers they otherwise wouldn’t see.

• Broader customer relationships drive up customer/agent satisfaction, retention and

customer lifetime value.

Broaden Broaden

Increase Customer Retention

Maximize Revenue and

CLV

Products represented

as share of wallet

Homeowners

AutoMissed Rev.

360 Degree View of

customer

Flood

Renters

Homeowners

AutoPet

Back-end Front-end

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Provides a multi-channel, multi-carrier software

platform that enables insurance distributors to retain

and grow revenue through a comprehensive insurance

solution

Important metrics:*

• Annual Revenue Growth: Flat growth in Q1 2015 compared to Q1

2014

• New Signings: Expanded relationships with three biggest customers

and launched a partnership with Google Compare

• Total Customers: Insurance carriers (63, of which 5 are carrier

distribution partners), independent agents (2,100), alternative

distribution partners (4), and state exchange (1)

• Pipeline: Opportunities grew from six to nine large, mid-to-late stage

deals, while all prior opportunities remain in pipeline

• TAM: Multi-billion dollar

• More than $1 billion of premium running through the platform, up from

$850 million at the end of 2014

• Competitive Moat: Platform is integrated into 63 of the largest

insurance carriers and has over 3,000 carrier connections which creates

the largest source of insurance flow for direct carriers, agents, agencies

and alternative insurance distributors

• Operating cash flow negative for the year

• Multi-year/multi-million dollar contracts

* As of 3/31/15 unless otherwise noted

Actua’s Verticals

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FolioDynamix: Maximizing Revenue for Wealth Managers

Advisors are wasting 60% of their time

on non-revenue generating tasks.

The FolioDynamix

Platform enables:

FOCUS ON

REVENUE

GENERATING

ACTIVITIES

• Prospecting

• Client relationship

building

• Driving referrals

• Cross selling

• Investment research

• Proposal generation

• Trade execution

• Tax optimization

• Portfolio rebalancing

• Professional sales

materials

• Performance reporting

• Client reporting

Source: http://www.fundspeople.com/system/media/5047/original/Encuesta.pdf?1382692734

Advisors using the FolioDynamix

platform can maximize revenue,

efficiencies, productivity, and agility

OUTSOURCE

NON-REVENUE

GENERATING

ACTIVITIES

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Actua’s Verticals

Enables the delivery of client-centric, innovative, scalable,

wealth management solutions through secure, cloud-based,

fully integrated, advisory products and solutions

Important Metrics:*

• Annual Revenue Growth: 27% in Q1 2015 compared to Q1 2014

• New Signings: Signed eight new multi-year deals since the beginning

of 2015, five of which are large banks; seven are medium-sized (six-

figure deals); and one is a large deal (seven-figure)

• Total Customers: More than 200 banks, brokerage firms and large

RIAs

• Pipeline: 25% pipeline growth since the beginning of 2015

• TAM: Multi-billion dollar

• Competitive Moat: Comprehensive, client-centric technology platform

with integrated proprietary advisory products

• Operating cash flow positive for the year

• Multi-year/multi-million dollar contracts

• $688 billion in assets under administration as of 12/31/2014

• More than 97,000 advisors and users

• $4.1 billion in regulatory assets under management

*As of 3/31/15 unless otherwise noted

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GovDelivery: Reach, Engage and Convert

• Insight

• Automation

• Segmentation

Creating safer communities,

happier commuters, healthier

families and better government.

The Old Way The New Way

TV Commercials

Print Ads

Radio

Commercials

Word-of-Mouth

Email / List Serves

• Networks

• Overlays

• Sign Ups

• Messaging

• Mobile

• Social

• Targeted Messages

• Drive Action

80 Million Citizen Network

REACH

ENGAGE

CONVERT

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**

Digital communications and marketing platform that enables

public sector organizations to effectively reach citizens and

drive action

Important metrics:*

• Annual Revenue Growth: 25% in Q1 2015 compared to Q1 2014

• New Signings: Closed 29 deals in Q1 2015, reporting strongest

Q1 ever in the state and local markets and closed several deals

with federal agencies subsequent to quarter end

• Total Customers: Serving 1,000+ federal, state, local and UK

government agencies reaching 80 million citizen subscribers

• Pipeline: 20% pipeline growth since the beginning of 2015,

including 16 federal program opportunities

• TAM: > $1 billion

• Competitive Moat: Subscriber base creates network effect,

significantly expanding reach and audience for each customer

• Operating cash flow positive for the year

• Annual subscription revenue model

* As of 3/31/15 unless otherwise noted

Actua’s Verticals

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MSDSonline: Automating the Desktop of the Safety Manager

SDS/Chemical Mgmt.

Incident Mgmt. & Reporting

Audit & Inspections

Training

Compliance Mgmt. & Education

Mgmt. of Change

Risk Analysis

Green House Gas

Sustainability Metrics & Reporting

Complexity &

Reporting

Significant Consequences:

Corporate Responsibility

Corporate Reputation

Law Suits and Litigation

Costly Fines(5-figure/day)

External Pressures:

Regulatory Pressure

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Environmental, Health and Safety compliance platform

that enables organizations to meet stringent and costly

OSHA requirements

Important Metrics:*

• Annual Revenue Growth: 41% in Q1 2015 compared to Q1 2014

• New Signings: Added 562 new customers in Q1 2015, including two

cross-sell wins with two large manufacturers made possible by the

combined MSDSonline/KMI platforms. These new signings primarily

consisted of new platform customers (those that have access to the

full platform of products) with higher ASPs.

• Total Customers: Over 10,000 companies; protecting more than 8

million employees in U.S. and Canada

• Pipeline: Growth is slightly ahead of revenue growth and is skewed

towards large platform customers (customers with access to the full

platform of products)

• TAM: > $3 billion

• Competitive Moat: Database of over 8 million material safety data

sheets is the only comprehensive web-based library that ensures

100% compliance for companies and continues to expand as new

customers come onto the platform

• Operating cash flow positive for the year

• 3-year subscription revenue model

* As of 3/31/15 unless otherwise noted

Actua’s Verticals

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Needham Interconnect Conference

August 4, 2015