JMP Securities 2015 Technology Conference

Transcription

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 Actua Corporation / All Rights Reserved / 2

3 Non-GAAP Financial Measures Non-GAAP net income (loss), non-gaap net income (loss) per diluted share and non-gaap cash flows from operations 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, loss (income) from discontinued operations and impact of non-controlling interest for 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). Non-GAAP cash flows from operations is GAAP cash flows from operations excluding cash amounts associated with impairment related and other costs and transaction expenses. Actua's consolidated companies are BOLT, GovDelivery and MSDSonline as of September 30,2014. Please note the following: FolioDymanix s results are not included BOLT became a consolidated company on December 27, Actua has deemed BOLT s operating results for the final four days of 2012 insignificant for consolidation purposes. Therefore, BOLT is included in equity loss for all 2012 periods presented, and BOLT s results are presented in Actua s consolidated results beginning on January 1, BOLT became a consolidated company on December 27, Actua has deemed BOLT s operating results for the final four days of 2012 insignificant for consolidation purposes. Therefore, BOLT is included in equity loss for all 2012 periods presented, and BOLT s results are presented in Actua s consolidated results beginning on January 1, MSDSonline's results are not included in Actua's results for periods prior to Q as Actua did not acquire an ownership stake in MSDSonline until March 30, CIML s continuing operating results are included in Actua s consolidated results from July 11, 2012 to February 20, 2013 as Actua owned 51.6% and controlled CIML during this period. CIML was an equity method company for periods prior to July 11, 2012 and, accordingly, was included in the equity loss line item. Actua s ownership in CIML was diluted as part of the Channel Intelligence sale described below, and CIML became an equity method company on February 20, 2013 for periods going forward. Channel Intelligence, Investor Force and Procurian were sold in Q1, Q1 and Q4 2013, respectively, and are presented as discontinued operations under GAAP. Their results are presented within our non-gaap measures as Loss (income) from discontinued operations and impact of noncontrolling interest for 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 Actua Corporation / All Rights Reserved / 3

5 Overview Multi-vertical cloud software company Exceeded 2014 revenue and earnings guidance, reporting $84.8 million of revenue and $(0.37) of adjusted net income for the year Generated $4.5 million in operating cash flow in Q guidance ranges: $133 million to $138 million of revenue (net of $2.5 million of deferred revenue) $(0.37) to $(0.41) of ANI Between $(6.0) million and $(10.0) million of annual operating cash flow 87% recurring revenue with 97+% retention rates Operating under 4 market leading brands Leader in each market at early stage of cloud adoption 3 of 4 brands are operating cash flow positive Investing for growth with emphasis on sales and marketing, product development and tuck-in acquisitions 2015 Actua Corporation / All Rights Reserved / 5

6 Evolution of Cloud Computing Space 1 ST WAVE 2 ND WAVE Emergence of SaaS Software is eating the world The cloud is eating software 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 2015 Actua Corporation / All Rights Reserved / 6

8 What it Means to be an Actua Company Being an Actua Company makes it easier to: Sell to customers Accelerate market share and adoption Attract, grow and retain talent Deliver innovation faster 2015 Actua Corporation / All Rights Reserved / 8

9 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 Adoption Proven customers, yet < 10% total market penetration Attractive Competitive Dynamics Clear competitive moat via big data and network effect 2015 Actua Corporation / All Rights Reserved / 9

10 Actua s Platforms Audience Building / Efficiency / Actionable Insight Public Sector Communications Market Safety / Compliance / Regulatory Reporting EH&S Compliance Market MULTI- BILLION DOLLAR Total Addressable Market Distribution / Access / Retention Insurance Market Investment / Wealth Management Wealth Management Market 2015 Actua Corporation / All Rights Reserved / 10

11 Figures shown in millions Revenue Growth $ Guidance Range: $133.0M - $138.0M $ Guidance Range: $83.0M - $84.5M Actual = $84.8M $70.0 $35.0 $ Actual 2013 Actual 2014 Actual 2015 Guidance 2015 Actua Corporation / All Rights Reserved / 11

12 Non-GAAP Net Income/Share $0.00 ($0.15) ($0.30) ($0.45) 2014 Guidance Range: $(0.39) - $(0.41) Actual = $(0.37) 2015 Guidance Range: $(0.37) - $(0.41) ($0.60) 2012 Actual 2013 Actual 2014 Actual 2015 Guidance 2015 Actua Corporation / All Rights Reserved / 12

13 Financial Profile Gross Margins % Sales and Marketing % General and Administrative % Research and Development % 71% 46% 41% 15% 72% 45% 32% 17% Recurring Revenue % 87% 87% Retention Rates % 95% 97% %s determined excluding stock-based compensation and deferred revenue adjustments 2015 Actua Corporation / All Rights Reserved / 13

14 Actua s Platforms 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: 52% in 2014 compared to 2013 New Customer Bookings: Closed one new customer after quarter-end, which we expect to launch in August and expect to be a multi-year, multi-million dollar opportunity once implemented Total Customers: Insurance carriers (61, of which 5 are carrier distribution partners), independent agents (2,100), alternative distribution partners (4) and state exchange(1) TAM: Multi-billion $$ $850 million of premium running through the platform, up from $140 million at the beginning of 2014 Competitive Moat: Platform is integrated into 61 of the largest insurance carriers and has ~2,800 carrier connections which creates the largest source of insurance flow for direct carriers, agents, agencies and alternative insurance distributors Operating cash flow negative Multi-year/multi-million dollar contracts * As of 12/31/ Actua Corporation / All Rights Reserved / 14

15 Actua s Platforms 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: 43% in 2014 compared to 2013 New Customer Bookings: Added medium sized bank with $3B in assets as a customer of our full-service turnkey asset management platform and a small RIA for a TAMP Solution Total Customers: > 200 banks, brokerage firms and large RIAs TAM: Multi-billion $$ Competitive Moat: Comprehensive, client-centric technology platform with integrated proprietary advisory products Operating cash flow positive Multi-year/multi-million dollar contracts $668B in assets under administration 89.7K+ Advisors and users $3.7B in regulatory assets under management *As of 12/31/ Actua Corporation / All Rights Reserved / 15

16 Actua s Platforms ** Digital communications and marketing platform that enables public sector organizations to effectively reach citizens and drive action Important metrics:* Annual Revenue Growth: 22% in 2014 compared to 2013 New Customer Bookings: Record growth in state, local and UK markets in 2014; closed 37 deals in Q (largest number ever in a quarter), including a new 7-figure federal program contract Total Customers: Serving 1,000+ federal, state, local and UK government agencies reaching 75 million citizen subscribers TAM: > $1 billion Competitive Moat: Subscriber base creates network effect, significantly expanding reach and audience for each customer Operating cash flow positive Annual subscription revenue model * As of 12/31/ Actua Corporation / All Rights Reserved / 16

17 Actua s Platforms Environmental, Health and Safety compliance platform that enables organizations to meet stringent and costly OSHA requirements Important Metrics:* Annual Revenue Growth: 45% in 2014 compared to 2013 New Customer Bookings: Signed 600 new customers in Q4 2014; average annual contract value increased 18% over prior year Total Customers: Approximately 10,000 enterprises, midsized companies, universities and health systems; protecting more than 5 million employees in U.S. and Canada TAM: > $3 billion Competitive Moat: Database of 7.5 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 3-year subscription revenue model * As of 12/31/ Actua Corporation / All Rights Reserved / 17

18 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 2015 Actua Corporation / All Rights Reserved / 18

20 Consolidated Income Statements (In thousands, except per share data) Three Months Ended December 31, Year Ended December 31, Revenue $ 26,591 $ 17,680 $ 84,804 $ 59,201 Operating Expenses Cost of revenue (a) 8,091 4,935 24,420 17,757 Sales and marketing (a) 10,876 8,335 39,710 28,129 General and administrative (a) 15,062 7,085 51,784 30,960 Research and development (a) 4,648 2,306 15,408 9,032 Amortization of intangibles 3,569 2,259 10,532 8,470 Impairment related and other 95 3,525 1,187 4,292 Total operating expenses 42,341 28, ,041 98,640 Operating income (loss) (15,750) (10,765) (58,237) (39,439) Other income (expense): Other income (loss), net 4,280 (4,032) 5,300 (4,210) Interest income Interest expense (13) (408) (1,613) (1,484) Income (loss) before income taxes, equity loss and discontinued operations (11,412) (15,128) (54,087) (44,906) Income tax benefit (expense) 10,896 17,601 13,271 17,571 Equity loss - (1,044) (776) (2,963) Income (loss) from continuing operations (516) 1,429 (41,592) (30,298) Income (loss) from discontinued operations 10, ,685 14, ,339 Net income (loss) 9, ,114 (27,566) 202,041 Less: Net income (loss) attributable to the noncontrolling interest (683) (2,067) (4,246) (7,018) Net income (loss) attributable to Actua $ 10,404 $ 200,181 $ (23,320) $ 209,059 Amounts attributable to Actua common shareholders: Net income (loss) from continuing operations $ 167 $ 2,803 $ (37,346) $ (25,669) Net income (loss) from discontinued operations 10, ,378 14, ,728 Net income (loss) attributable to Actua common shareholders $ 10,404 $ 200,181 $ (23,320) $ 209,059 Basic and diluted net income (loss) per share: Income (loss) from continuing operations attributable to Actua common shareholders $ 0.00 $ 0.08 $ (1.01) $ (0.70) Income (loss) from discontinued operations attributable to Actua common shareholders Income (loss) attributable to Actua common shareholders $ 0.28 $ 5.46 $ (0.63) $ 5.72 Diluted net income (loss) per share: Income (loss) from continuing operations attributable to Actua common shareholders $ 0.00 $ 0.08 $ (1.01) $ (0.70) Income (loss) from discontinued operations attributable to Actua common shareholders Income (loss) attributable to Actua common shareholders $ 0.28 $ 5.18 $ (0.63) $ 5.72 Shares used in computation of basic net income (loss) per common share attributable to Actua Shares used in computation of basic and diluted net income (loss) per common share attributable to Actua common shareholders 36,780 36,664 37,130 36,536 36,780 38,680 37,130 36,536 (a) Includes equity-based compensation of: Cost of revenue $ 21 $ 15 $ 76 $ 63 Sales and marketing General and administrative 6, ,509 6,081 Research and development $ 6,917 $ 372 $ 23,889 $ 6, Actua Corporation / All Rights Reserved / 20

21 Consolidated Balance Sheets December 31, December 31, ASSETS Cash and cash equivalents $ 103,134 $ 334,656 Restricted cash 1,484 1,242 Accounts receivable, net 22,787 11,300 Deferred tax asset Prepaid expenses and other current assets 4,413 5,907 Total current assets 132, ,105 Fixed assets, net 7,894 5,840 Goodwill and Intangibles, net 369, ,221 Cost and equity method investments 17,672 20,373 Deferred tax asset 3,009 - Other assets, net 1,288 1,179 Total Assets $ 531,876 $ 529,718 LIABILITIES AND EQUITY Current maturities of other long-term debt $ 500 $ 5,902 Accounts payable 12,634 2,970 Accrued expenses 8,816 5,176 Accrued compensation and benefits 9,241 8,732 Deferred revenue 33,980 21,830 Total current liabilities 65,171 44,610 Long-term debt - 6,008 Deferred revenue Other liabilities 6,727 1,726 Total Liabilities 72,473 52,598 Redeemable noncontrolling interest 6,221 3,442 Total Equity 453, ,678 Total Liabilities, Redeemable noncontrolling interest and Equity $ 531,876 $ 529, Actua Corporation / All Rights Reserved / 21

22 Revenue (Millions) Demonstrated Quarterly Growth $30.0 $26.6 $25.0 $20.8 $20.0 $16.1 $17.7 $18.4 $19.0 $15.0 $12.0 $13.5 $10.0 $8.0 $9.0 $5.0 $4.2 $5.4 $0.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Actua Corporation / All Rights Reserved / 22

23 Non-GAAP Net Income/Share Operating Cash Flow Quarterly Non-GAAP Net Income/Share Non-GAAP Net Income/Share Operating Cash Flow $0.20 $15.00 $0.15 $10.00 $0.10 $0.05 $5.00 $0.00 $0.00 -$0.05 -$0.03 -$5.00 -$0.10 -$0.15 -$0.14 -$0.10 -$0.08 -$0.09 -$0.10 -$0.12 -$0.12 -$ $0.20 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q $ Actua Corporation / All Rights Reserved / 23

24 Cost of Repurchase (in millions) Actua Stock Repurchases by Year $ $9.3 $8.6 $8.3 $ Repurchased 1.9 million shares Per share cost $4.75 $2.7 Repurchased 0.5 million shares Per share cost $5.45 None Repurchased Repurchased 0.8 million shares Per share cost $10.17 Repurchased 0.9 million shares Per share cost $8.94 Repurchased 0.9 million shares Per share cost $13.23 Repurchased 0.8 million shares Per share cost $16.52 Repurchased 0.1 million shares Per share cost $17.66 $ Total amount deployed from inception of buyback program through current = $55.3 million to repurchase 6.0 million shares at an average price of $9.23, with $94.7 million remaining under plan 2015 Actua Corporation / All Rights Reserved / 24