Move Investor Presentation

Transcription

2 Disclaimer This presentation contains "forward-looking" statements that involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, our results may differ materially from those expressed or implied by such forwardlooking statements. All statements other than statements of historical fact could be deemed forward-looking, including, but not limited to, financial targets and goals; any projections of financial information; any statements about historical results that may suggest trends for our business; any statements of the plans, strategies, and objectives of management for future operations; any statements of expectation or belief regarding future events, potential markets, market size or market growth, future offerings, our ability to leverage our investments, technology developments; and any statements of assumptions underlying any of the items mentioned. These statements are based on estimates and information available to us at the time of this presentation and are not guarantees of future performance. Actual results could differ materially from our current expectations as a result of many factors, including but not limited to: (i) adverse changes in general economic or market conditions; (ii) delays or reductions in information technology spending; (iii) competitive factors, including but not limited to pricing pressures, industry consolidation, entry of new competitors and new applications and marketing initiatives by our competitors; (iv) our ability to manage our growth effectively; (v) our limited operating history, which makes it difficult to predict future results; (vi) the development of the market for enterprise cloud services; (vii) acceptance of our applications and services by customers; (viii) breaches in our security measures or unauthorized access to our customers' data; and (ix) changes in sales may not be immediately reflected in our results due to our subscription model; as well as other risks that are set forth in our most recent annual report on Form 10-K and quarterly reports on Form 10-Q filed with the Securities and Exchange Commission ( SEC ), as well as any subsequent reports filed with or furnished to the SEC. These reports are available on our website at and the SEC's website at We assume no obligation to, and do not currently intend to, update any such forward-looking statements. This presentation includes certain Non-GAAP financial measures. The most directly comparable GAAP information and a reconciliation between the Non-GAAP figures are provided on slide 39. 2

4 Move Overview Who We Are: Leading real estate information marketplace for consumers and real estate professionals What We Deliver: Smarter consumer, smarter connection, quicker to close 2012 Results: Revenue: $199 million; Adjusted EBITDA*: $27 million Employees: 943 (Dec. 31, 2012) Headquarters: San Jose, CA REALTORS = ACCURATE AND COMPREHENSIVE CONTENT LARGE AUDIENCE WITH HIGHEST QUALITY LEADS *See appendix for reconciliation of Non-GAAP Adjusted EBITDA to the most directly comparable measures. 4

5 Move Brands Consumer Advertising Software and Services Accurate and comprehensive real estate data for consumers Leading SaaS CRM platform for real estate professionals 5

6 Investment Highlights Large and growing addressable market as real estate transactions shift online Alignment with real estate industry provides unique competitive advantages Accurate and comprehensive content creates superior consumer experience Engaged, transaction-ready consumer audience produces high ROI leads for real estate professionals Fast-growing SaaS and data analytics platform for the real estate industry drives further ROI on leads Revenue growth seven consecutive quarters, steady cash flow and industry leading margins 6

7 Large Addressable Market for Online Real Estate 5.0m homes x $220k = $1 trillion 5% commission = $50 billion 10% on marketing = $5 billion Less than $1 billion currently spent online Sources: National Association of Realtors (2012); Borrell Associates (2010) 7

8 Massive Real Estate Value Chain Annual Value ($128 Billion) Property commissions / marketing $50 billion Rentals $5 billion Moving $17 billion Mortgage Origination $56 billion Sources: National Association of Realtors (2011); Mortgage Bankers Association Origination Estimates (2009); American Housing Survey For The US: 2007 (HUD and US Census); American Moving & Storage Association 8

9 Housing Market Recovery Well Underway For Sale Listings Inventory (MM): US Total Median Age of Inventory (Days on market) Median List Price ($000 s): US Total $ $186 Inventory tight Velocity high Prices up Source: Move Internal Metrics, Single-Family Homes, Condos, Townhomes and Co-ops 9

10 Move Delivers Value to Entire Real Estate Marketplace Consumers Real Estate Professionals Exceptional user experience Accurate and timely listings Applications wherever and whenever you want Comprehensive content to address consumer needs throughout lifecycle More engaged, transaction-ready consumers High ROI from leads that are more likely to transact Relationship management tools to convert leads and manage customer lifecycle Content distribution and data analytics tools to control and analyze marketing efforts 10

11 Realtor.com Preferred by both Consumers and Real Estate Professionals Consumers Real Estate Professionals Net Promoter Score (1)(2) Net Promoter Score (1)(3) 10 Zillow Trulia Zillow 1 Trulia Source: Move Brand Tracker Study (Feb 2013 Consumer study N=943; June 2013 Real Estate Industry study N=805); ResearchNow/eRewards invite-only online panel Notes: 1. Net promoter score range is -100 (everyone is a detractor) to +100 (everyone is a promoter), based on polling users of each service. Net Promoter Score equals % of promoters (rank services as 9-10 out of 10) minus % of detractors (rank service as 0-6 out of 10) 2. Based on question: How likely are you to recommend the following real estate sites to a friend or colleague? 3. Based on question: How likely are you to recommend each of these real estate marketing and technology tools, or apps? 11

12 Our Industry Alignment Creates Unique Competitive Advantage Differentiated and unique access to data on realtor.com Content supplied directly by over 800 Multiple Listing Services Unique intelligence into online real estate ecosystem Realtors trust ListHub to distribute and monitor their listings Supported by real estate community Shared brand with over 1 million Realtors Realtors will remain critical partners to home buyers / sellers Overwhelming majority use a Realtor 12

13 Online Real Estate Market Leadership Revenue Segments Consumer Advertising 78% Software & Services 22% 13

14 Realtor.com Enables Local 1-on-1 Relationships at National Scale 14

15 Most Transaction-Ready Consumers 50 Million + Consumers Broad Consumer Audience Serious Homebuyers Purchase 5 Million Home Transactions = 10 Million Buyers and Sellers 15

16 Best Content and Industry Alliance MLS Syndicators Agent Website REALTOR LISTING MLS (800) Virtual Tours Broker Feeds Franchisors Offline Media Publisher Direct From the Source 90% Updated Every 15 Minutes Sales History Sold/Pending Data in Real Time All Others Multiple Sources Slow to Add Slow to Remove Duplications and Inaccuracies Source: Move Internal Metrics Q

17 Highest Quality Content % Q: On which website did you find your home? 31 Zillow.com 23 Redfin.com 13 Trulia.com 7 RealtyTrac.com Source: California Association of REALTORS 2013 Survey of California Home Buyers 17

18 Most Engaged and Valuable Audience Pageviews per UV Minutes per UV Quarterly Revenue per UV* 21.4x 20.5x 18.4x 26.3x 24.7x 18.2x $3.23 $2.09 $1.53 realtor.com Zillow Trulia realtor.com Zillow Trulia realtor.com Zillow Trulia Source: Unique Visitors, Page Views and Minutes based on comscore Multi-Platform report including PC and mobile for September 2013 *Represents revenue from most recent reported quarter (Q3 13 for Move and Trulia) and Analyst Consensus Estimates for Zillow Q

19 Highest Lead Volume % Q: What is your #1 source of lead volume? 9.8 Homes.com 1.4 Trulia.com 3.4 Zillow.com 3.6 Source: PAA Research

20 We Have the Best Data for Consumers Data Accuracy Integrated Maps Sales History Move gets data directly from over 800 MLSs Zillow and Trulia missing 21% and 19% of active listings, respectively Move has 98% of all existing homes listed for sale 90% updated every 15 minutes, the rest daily Best-of-breed search experience Focus on local browsing and content Solutions integrate mobile and online platforms Enhances pricing transparency Source: WAV Group, October 2012, Move Internal Metrics Q

21 Mobile Technology Driving Consumer Engagement Across Devices Mobile users are 5x more engaged than website users Mobile page views grew over 30% year over year in Accounts for 50% of all homes viewed Source: Move Internal Metrics Q

22 Consumer Advertising Products Monetization Showcase Listings: For selling agents Enhanced home listings sold on a subscription basis Co-Broke Connection: Featured Products: Display Ads: For buyers agents Leads of potential home buyers sold on subscription basis Featured Home carousel placement and Agent/Broker display ads priced on subscription General display ads sold on CPM basis Adjacencies: Mortgage, rentals, moving, senior housing 22

23 Online Real Estate Market Leadership Revenue Segments Consumer Advertising 78% Software & Services 22% 23

24 Software and Services Products Overview Relationship Management Content Distribution and Data Analytics [Screenshot] CRM and marketing SaaS platform for Real Estate Professionals 24

25 TigerLead Helps Close Sales Quickly TigerLead makes leads smarter by helping real estate professionals understand the DNA of consumers needs. Views 152 Mt. Pleasant St. for the 3rd time Live-in ready basement Returned to search site four times this week 3 to 4 bedrooms $325,000 to $400,000 25

26 Top Producer is a Lifetime Relationship Manager 26

27 ListHub Syndicates Listing Distribution and Provides Insights from Data Syndicated Listings to 120 Publishers Cross-Network Broker and Agent Reporting 27

28 Growth Drivers Grow Consumer Audience Increase Productivity of Real Estate Professional Expand Into Adjacent Opportunities Improving Housing Market Investment strategy Brand Marketing ( Find it First ) New Content and Features to continue to lead engagement and connections Integrated lead, listing, relationship management hub Leverage data; provide unparalleled insights Beyond the buyer and seller: Rentals, senior housing, moving, lending, media More listings, higher median price spurs growth in total transaction $s More NAR members = more subscribers Platform, data, audience Strategic and disciplined acquisitions 28

30 Financial and Business Highlights Recent Quarterly Performance (Q3 13) Financial Highlights Eight sequential quarters of revenue growth; 19% y/y in Q3 to $58.8M Healthy adjusted EBITDA margin of 14% in Q3 13 Strong balance sheet with $114M in cash as of 9/30/13 Operating Cash Flow $10.5M in Q3 Free Cash Flow $8.0M in Q3 28M monthly unique users Source: Move Internal Metrics Q3 13 Subscription business with predictable revenue stream Diversified monetization portfolio included leads/listings, performancebased and SaaS products Scalable sales force and back office infrastructure Conservative accounting approach Invest for growth mindset with a track record of value creating investments $100M Convertible Debt secured Aug 2013 See *See appendix appendix for for reconciliations reconciliation of of non-gaap Non-GAAP operating Adjusted expenses EBITDA to to the the most most directly directly comparable measures. Free cash flow represents Cash Flow from Operations less Capital Expenditures. 30

31 Sequential Revenue Growth Trend 8 consecutive quarters of Revenue Growth Revenue ($M) Revenue Adjusted EBITDA Adj. EBITDA ($M) $65 $16 $60 +17% +19% $14 $12 $55 +12% +14% $10 $50-3% -3% +1% +6% $8 $45 $6 $4 $40 $2 $35 Q4'11 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 $0 Adjusted EBITDA Margins % 11.3% 13.9% 13.9% 14.7% 10.9% 12.2% 13.7% *See appendix for reconciliation of Non-GAAP Adjusted EBITDA to the most directly comparable measures. Percentages above revenue bars represent year-over-year growth rate. 31

32 Total Revenue Annual Revenue & YoY Growth ($M) $227.0 Quarterly Revenue & YoY Growth ($M) $59 $199 $192 $ (E) Q Q YoY Growth +4% +14% +19% 2013 Estimate based on most recent guidance 32

33 Revenue by Segment Annual Revenue & YoY Growth ($M) $176 $162 $156 Quarterly Revenue & YoY Growth ($M) $46 $40 $36 $37 $51 $9 $ (E) Q Q YoY Growth Consumer Advertising +4% +9% +7% +14% Software & Services +3% +37% +5% +41% 2013 Estimate based on most recent guidance Consumer Advertising Software & Services 33

34 Historical Listing Count & Revenue per Listing 8,000 7, M 7.5M 6.6M 6.3M 6.2M 6.5M 6.7M $70.00 $ ,000 $ ,000 $ ,000 3,000 $22.85 $21.30 $23.60 $25.86 $27.12 $27.58 $27.26 $ ,000 $ ,000 $ Q Q Q $0.00 Trailing 12 Months Listing Count Consumer Advertising Revenue per Historical Listing Source: Move Internal Metrics and Consumer Advertising category revenues 34

35 Successful Record of M&A ListHub Publisher Growth September 2010 TigerLead Rev Growth September 2012 Moving.com + Relocation.com* October 2012 All Other MovingGuru 10% 6% 12% Movers.com 27% Moving.com 18% 123Movers.com 27% Relocation.com Q4'12 Q1'13 Q2'13 Q3'13 ListHub publishers up over 80% since Sept 2010 acquisition TigerLead Revenue up over 40% since Sept 2012 acquisition With the Oct 2012 Relocation.com acquisition, Move now owns 54% of the moving lead aggregator marketplace *Moving Category estimated percent of total lead aggregator revenue generated annually. 35

36 Strong Balance Sheet As of Sep 30, 2013 Assets Liabilities Cash & Equivalents $ Deferred Revenue $ 7.7 Other Current Assets 20.9 Other Current Liabilities 29.3 Property and Equipment, Net 23.2 Non-current Liabilities 5.3 Investment in Unconsolidated JV 5.4 Convertible Debt (1) 81.7 Other Long Term Assets 65.6 Stockholder s Equity Total Assets $ Total Liabilities and Stockholder s Equity $ (1) $100M Convertible Debt Secured Aug Approximately $82M on Balance Sheet with remaining $18M included in additional Paid-in-Capital. 36

37 Investment Highlights Large and growing addressable market as real estate transactions shift online Alignment with real estate industry provides unique competitive advantages Accurate and comprehensive content creates superior consumer experience Engaged, transaction-ready consumer audience produces high ROI leads for real estate professionals Fast-growing SaaS and data analytics platform for the real estate industry Revenue growth seven consecutive quarters, steady cash flow and industry leading margins 37

39 GAAP to Non-GAAP Reconciliations $ in Thousands Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 FY'11 FY'12 Reconciliation of Adjusted EBITDA Net income (GAAP) $804 $3,984 $808 $1,444 $1,785 $1,588 ($100) $466 $138 $7,260 $5,625 Plus: Interest expense / (income) 2 (18) (1) (51) 6 Income tax (benefit) / expense (15) Stock-based compensation and charges 1,157 1,466 1,463 2,397 1,996 2,416 2,623 2,876 2,742 5,907 8,272 Depreciation 2,340 2,414 2,524 2,389 2,282 2,356 2,399 2,519 2,762 9,393 9,551 Termination costs from dissolution of JV Amort. of intangibles, incl. unconsolidated JV , ,063 1,110 2,294 3,064 Adjusted EBITDA (Non-GAAP) $5,547 $8,590 $5,413 $6,872 $6,864 $7,766 $5,920 $7,002 $8,044 $25,695 $26,915 Note: In this presentation we sometimes refer to Non-GAAP measures that we and securities analysts use in measuring our performance. We believe that these measures assist investors and management in analyzing trends in the Company s business. Investors should not consider these Non-GAAP measures as substitutes, but rather as additions, to financial reporting measures prepared in accordance with GAAP. It should be noted that these measures, as defined, may not be comparable to similarly titled measures used by other companies. Figures may not sum due to rounding. 39