The Internet Video Engine - RhythmOnemarketing.corporate.rhythmone.com/docs/EarningsPre... ·...
Transcript of The Internet Video Engine - RhythmOnemarketing.corporate.rhythmone.com/docs/EarningsPre... ·...
Fiscal Year 2012 – Results and Discussion SURANGA CHANDRATILLAKE, CEO
S. BRIAN MUKHERJEE, COO
JONATHAN SPIRA, CFO
London, UK - May 18, 2012
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The Internet Video Engine
safeharbor statement During this presentation we may make various remarks about the company’s future expectations, plans
and prospects, which constitute forward-looking statements for purposes of the safe harbor provisions
under The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from
those indicated by these forward-looking statements as a result of various important factors, including
those discussed in blinkx’s most recent prospectus, which is on file with the Financial Services Authority.
Any forward-looking statements represent our views only as of today and should not be relied upon as
representing our views as of any subsequent date. While we may elect to update forward-looking
statements at some point in the future, we specifically disclaim any obligation to do so, even if our
estimates change and, therefore, you should not rely on these forward-looking statements as
representing our views as of any date subsequent to today.
During this call we may be referring to non-IFRS financial measures. These non-IFRS measures are not
prepared in accordance with generally accepted accounting principles. A reconciliation of the non-IFRS
financial measures to the most directly comparable IFRS measures will be made available in the Investor
Relations section of our website, www.blinkx.com, under the heading Investors.
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• Revenue grew 73% to $114M, breaking the $100M ceiling for the first time
• Four sequential halves of operating profitability
• Cash from operations grows to $13.5M*, representing strong conversion cycle
• Cash balance at the end of the period was $38.4M, with no debt
• Completed Burst and PVMG, acquisition, expanding to 275 employees in 10 offices
• Strengthened executive management team with the appointments of S. Brian
Mukherjee (COO) and Frank Pao (EVP Business Affairs & General Counsel)
• Video search technology continues to lead the market with 2 new patents granted
• Closed landmark content and technology partnerships, including AOL, Samsung, Sony
• 5-Year CAGR of 104% v. 20% for the Online Video Advertising sector
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FY2012 Highlights
*Before one-time costs
Corporate Snapshot
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History Founded in 2004
IPO 2007
Headquarters Cambridge, UK
San Francisco, CA
Locations Boston, Cambridge, Chicago, London, Los Angeles, Montreal, New York, San Francisco,
Seattle, Tempe
Employees 275 Total : 178 Sales & Marketing, 67 Research & Development, 30 General & Administrative
Technology blinkx Video Search Engine and AdHoc Advertising Platform
Financials
(FY2012)
$114.4M – Revenue
$12.8M – Adjusted EBITDA
$11.3M – Operating Cash Flow
Partnerships 40+ Advertising Agencies, 1000+ Brands
800+ Content Partners, 2500+ Publishers
1. Market Overview – Video in a Hyper-Connected World
2. Technology Overview – Content Fragmentation and Video Search
3. blinkx Business Model – Video Everywhere
4. Financial Performance – Five Year and FY2012 Results
5. Conclusions and Q&A
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Agenda
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Video in a Hyper-Connected World
US & WORLDWIDE HH
BROADBAND PENETRATION 3
% P
en
etr
ati
on
US
WW
By 2015, one million minutes of
video – the equivalent of 674
days – will traverse the Internet
every second 1
Internet video is now 40% of
consumer internet traffic, and will
reach 62% by the end of 2015 1
In 2010, there were 780 million
online video viewers worldwide,
in 2016 there will be 1.3 billion 2
Peta
byte
s
INTERNET VIDEO TRAFFIC WW 1
1. Global IP Traffic Forecast 2010-2015, Cisco Systems
2. Online Video Viewers Worldwide, 2010 & 2016, eMarketer
3. US Fixed BB HH and Subs, 2010-2016, eMarketer
Fixed BB HH Penetration WW, 2010-2016, eMarketer
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Video Enhances the Text Web
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Proliferation of Connected Devices
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US SMARTPHONE/TABLET PENETRATION 2
Usa
ge i
n M
illio
ns
By 2015, nearly 3 billion people
will be using the Internet —
more than 40% of the world’s
projected population. On
average, there will be more than
two Internet connections for
each person on Earth, driven by
the proliferation of web-enabled
mobile devices 1
140 117 98 49
AVG. TIME (MINS) SPENT WITH
MEDIA (WW) 2011 3
1. Global IP Traffic Forecast 2010-2015, Cisco Systems
2. 2012 Trends: A Virtuous Circle of Technology and Content Adoption, eMarketer
3. Avg Time Spent per Day with Select Media According to Mobile Internet Users Worldwide, eMarketer
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+ INTERNET
Targeting, tracking,
measurability
TV
Emotive, story-
telling, brand
building
US ONLINE VIDEO AD SPENDING ($BN) 1
Advertisers Following Audience
1 US Online Video Ad Spending, 2011-2016, eMarketer
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ONLINE VIDEO AD SPEND COMPARED
TO TOTAL AD SPEND ($BN) 1
ADVERTISING COST PER THOUSAND
IMPRESSIONS BY MEDIUM, 2009/2010 2
1 US Ad Spending and Growth, 2011-2016, eMarketer
US Online Video Ad Spending, 2011-2016, eMarketer
2 Morgan Stanley: Internet Trends, Morgan Stanley
Advertisers Following Audience
Denotes
average CPM
Online Video Ad Spend
Total Ad Spend
1. Market Overview – Video in a Hyper-Connected World
2. Technology Overview – Content Fragmentation and Video Search
3. blinkx Business Model – Video Everywhere
4. Financial Performance – Five Year and FY2012 Results
5. Conclusions and Q&A
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Agenda
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Text search engines miss the VIDEO in Video Search
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BLINKX WATCHES the video, too
blinkx CORE Concept Recognition Engine based
on a patented combination of
Shannon’s Information Theory and
Bayesian Inference
blinkx understands the meaning contained in video
TEXTUAL
Advanced textual
analysis, page and site-
level human design
context analysis and visual
spidering with support for
over 200 video and audio
metadata file formats
SPEECH
RECOGNITION
Continuous, speaker-
independent, large
vocabulary speech
recognition. Neural
Network and Hidden
Markov Model-based
acoustic language modeling
VISUAL
ANALYSIS
Visual Analysis: Real-time
scene decomposition, On-
screen Character and
Facial Recognition, visual
and metadata Closed-
Caption extraction
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Video Search AdHoc
the blinkx ecosystem
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Capturing an Unfair Share of the Market
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AOL acquires
Truveo
blinkx
powers
video
search for
Ask
Google Video
shuts down blinkx
powers
video
search for
AOL Pixsy
shuts
down
blinkx powers
video search
for Lycos
US VIDEO AD SPENDING VS BLINKX
REVENUE
blinkx Revenue ($M)
US Video Ad Spending ($BN)
104% CAGR
20% CAGR
1. Market Overview – Video in a Hyper-Connected World
2. Technology Overview – Content Fragmentation and Video Search
3. blinkx Business Model – Video Everywhere
4. Financial Performance – Five Year and FY2012 Results
5. Conclusions and Q&A
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Agenda
Business Model
Audience
Monetisation
Advertisers
Internet Video Engine
Content
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KPIs and Opportunity AdHoc Conventional Tech & Svcs Opportunity
Description Direct sold and
platform premium
campaigns, including
video, rich media,
display and search
Non-premium, run of
network campaigns,
primarily display and
rich media
Technology and
services that support
current revenue
streams
Access to interactions
blinkx.com, blinkx
Syndicates, Burst,
PVMG, Mobile and
Connected TV API
partners
Revenue ($)
Revenue (%)
$91M
80%
$16M
14%
$7M
6%
$0
eCPM ($) $4.65
Premium: $6 - $70
Platform: $2 - $8
$0.66
High: $2.50
Low: $0.36
N/A $0
Interactions (B)
Volume (%)
19.6
4.2%
24.5
5.2%
N/A 421.6
90.5%
Trends • Device
proliferation
• Digital spend
growth
• eCPM Seasonality
• Trading Platforms
• Data driven buys
• High volume, low
value interactions
• High strategic value
• Insight into actual
spend patterns
• Leverage and drive
content partnerships
• Massive opportunity
• Direct and exchange
traded campaigns
• Potential
monetization
Acquisition Update – Burst Media
Description Online media and technology company
Locations Boston, Chicago, London; New York, Los
Angeles and San Francisco
Employees
103 - 45 Sales and Marketing, 35
Services and Support, 14 Products and
Technology, 9 G&A
Technology
Ad serving, ad management, publisher
management and real time bidding
enabled supply side platform
Products
Display, rich media, video, mobile and
social media ad formats and publisher
advertising inventory management
systems.
Relationships
1,400+ Publishers
500+ Advertisers and Agencies
155M Monthly Unique Visitors
400+ Billion Ad Impression Opportunity
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Acquisition Update – PVMG, Inc.
Description
Digital marketing holding company with an
PPC Ad Network and Full Service Digital
Marketing Agency
Locations New York, NY and Tempe, AZ
Employees
60 - 25 Services and Support, 15 Sales &
Marketing, 15 Product & Technology, 5
SG&A
Technology Leading pay-per-click advertising and
optimization platform
Products Search and Pay per Click, Rich Media,
Display Ads SEO, SEM, Mobile, Social
Relationships
500+ Advertisers
350+ Publishers
300+ Billion Ad Interactions/Year
Description
PPC Ad Network, Digital Marketing Agency
Locations New York, NY and Tempe, AZ
Employees
60 Total: 25 Services and Support, 15 Sales &
Marketing, 15 Product & Technology, 5
SG&A
Technology,
Expertise
Leading pay-per-click advertising and
optimization platform and Award winning
Search and Social Marketing Expertise
Products Text, Rich Media and Display Ads, SEO, SEM,
Mobile, Social, E-mail, Strategy and Analytics
Relationships
500+ Advertisers
350+ Publishers
300+ Billion Ad Impression Opportunity
1. Market Overview – Video in a Hyper-Connected World
2. Technology Overview – Content Fragmentation and Video Search
3. blinkx Business Model – Video Everywhere
4. Financial Performance – Five Year and FY2012 Results
5. Conclusions and Q&A
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Agenda
blinkx Confidential
5 Yr P&L Summary
Year 1
10 mo ended
31 Mar 2008
Year 2
12 mo ended
31 Mar 2009
Year 3
12 mo ended
31 Mar 2010
Year 4
12 mo ended
31 Mar 2011
Year 5
12 mo ended
31 Mar 2012
Revenue $6,545 $13,933 $33,664 $66,102 $114,397
GP ($000) $4,903 $9,831 $21,927 $43,156 $60,493
OPEX * $11,744 $20,288 $30,881 $35,931 $50,047
EBIT * ($6,841) ($10,457) ($8,954) $8,181 $10,446
EBITDA * ($6,578) ($10,149) ($5,821) $9,236 $12,818
OPERATING
CASH FLOW * ($6,418) ($9,028) ($4,949) $9,167 $13,549
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*Before one-time costs
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Revenues ($M) EBITDA* ($M)
Operating Cash Flow* ($M) EPS* (cents)
Financial Trends
*Before one-time costs
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FY12
FY11 Income Statement ($M) Operating Expenses ($M)
Comparative Financial Data
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FY 2012, ($M)
MARKETING
$50 (1%)
SEVERANCE
& STOCK COMP
$590 (13%)
STAFFING
$1,940 (41%)
PROFESSIONALS
$1,755 (37%)
FACILITIES
$380 (8%)
Transaction and Restructuring Costs
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Balance Sheet
As of March 31, 2012 ($M)
1. Market Overview – Video in a Hyper-Connected World
2. Technology Overview – Content Fragmentation and Video Search
3. blinkx Business Model – Video Everywhere
4. Financial Performance – Five Year and FY2012 Results
5. Conclusions and Q&A
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Agenda
• Fifth anniversary of the IPO:
– Online video advertising delivered on its promise
– Unique technology provided blinkx a head start in this accelerating sector
– Execution of key partnerships enabled blinkx to garner an unfair share of the
growing market
• Looking Forward:
– Online video advertising is set to continue growth
– Proliferation of devices and potential increase in the switch to digital spend may
provide further upside
• With content, advertisers, technology and now reach, blinkx is well
positioned to continue to garner an unfair share of this growing market
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Conclusion