Callidus Software Investor Presentation Name: Leslie Stretch first, last CEO Date Ron Fior CFO
Safe Harbor Statement Some of the comments we will make today are forward-looking statements. They are based upon our current expectations regarding market, economic, and competitive conditions; product plans; pricing; and other factors. There are many reasons why actual results may differ materially from our current expectations. Please refer to our Form 10-K and 10-Qs filed with the SEC which include a more thorough description of the risk factors that may affect our results. We expressly disclaim any obligation to update any forward-looking statements.
Agenda
Company Background Leader in Sales Performance Management (SPM) 2009: $81.0M Revenues/ 57% Recurring YTD 2010: $51.8M Revenues / 75% Recurring 1 st quarter of Non-GAAP Operating Profit under new business model in Q3 ~270 Employees 200+ Customers Worldwide Strategic Global Alliances
The Callidus Story 100% focused on Recurring Revenue Recurring Revenue beginning to dominate P&L Committed to sustaining Non-GAAP Operating Profit Delivering SaaS to all markets and all market levels Adding more product than ever before World class software Best in class look and feel and use-ability Key partnerships
Callidus is the Market Leader Largest Customer Base 230+ Customers 80+ On-Demand Customers Leadership Recognition Most Payees 2 Million Total Payees in 140+ countries 130,000+ On-Demand Subscribers $50bn paid and counting Strategic Global Alliances Chosen by more Fortune 1000 customers than any other vendor
#1 with the World s Leading Sales Forces Insurance 6 of the 10 world s largest Banking 4 of the 10 world s largest Communications & Media 5 of the 10 world s largest High Technology 7 leaders paying globally Pharmaceutical 5 of the 10 world s largest
Tangible ROI 50% increase in the win rate 50% higher attainment of team quota 55% increase in the number of reps achieving quota
Callidus Customers Out-Perform the Best in Class 24% higher adoption of processes to replicate superior sales behavior 48% shorter sales cycles 76% shorter timeto-productivity for new reps "Callidus customers out-perform the Best-in- Class sales organizations on the key metrics that matter to selling success.
Agenda
Callidus Sales Performance Management The collection of processes and technologies that manage the lifecycle of the sales professional to maximize sales effectiveness Control and drive the selling behavior your business needs Gain agility in the market Drive productivity with transparency
Sales Lifecycle Management Self-service platform: Delivering value to sales and channel users Selection & Onboarding Goal Assignment Incentive Deployment Rewards Management Talent Development Sales Continuity Central SPM console and analytics platform: Delivering control and visibility to administrators
Onboarding and Channel Management New integrated onboarding solution enables rapid agent onboarding Manages risk of new appointments Drives contract compliance Delivers distribution insight We chose the Callidus SPM suite to ensure we could rapidly on-board new producers to meet our capacity targets, while meeting compliance requirements. This integrated solution provides us with a real competitive advantage: it makes doing business with us easier for our producers, driving stronger channel loyalty, and helps save money through reduced leakage and overpayments.
Goal and Quota Management Drives top-line corporate target alignment throughout field Enables rapid sales target deployment and approvals Provides real-time visibility into performance against target Quota Management allows our company to easily track quota allocated throughout all levels of the sales organization in an efficient self-contained module. With the addition of Quota Management and Plan Communicator, manual processes will be replaced by processes dedicated to gaining efficiencies.
Incentive Management Drives sales and channel performance through targeted incentives Enables rapid go-to-market and mid-period adjustments Integrated modeling and analytics delivers financial control With the Callidus solution, incentive compensation is now a business asset. We have the power to use incentive compensation to address market changes and opportunities, and take a proactive part in helping the organization achieve its next level of growth and better meet the needs of our members.
Rewards Management Provides total compensation solution for mixed pay for performance programs Drives alignment to strategic targets Enables team collaboration and feedback on goal performance MBOs enable Novell to drive strategic initiatives as part of a comprehensive pay for performance program throughout global sales. This ensures that the sales force is driving revenue growth and longer term growth initiatives, while ensuring compensation costs are in step with our financial target achievement.
Talent Development and Coaching New solution to expedite new hire ramp up and time to productivity Profiles reps based on key sales performance measures Optimizes rep attainment across performance levels "The imperative to manage sales performance requires methods like sales coaching that can help drive optimal behavior and results. With Callidus integrating sales coaching into their suite they are advancing sales performance management to its full potential.
Callidus Solution Support On Demand or On Premises State of the art high performance data centers 99.999% availability SAS 70 Type II security 24x7 end to end service delivery Global Support Centers World-wide coverage for 24x7 support Multi language Business Process Outsourcing Sales Performance Sales Operations Sales Performance Intelligence Sales Performance Optimization Global Community Active user community Industry leading user groups Customer advisory boards Dedicated to delivering excellence and value
High-Level Solution Roadmap Recruiting *Sales Assessments *Workforce Planning Onboarding Channel Management Producer Management Sales Coaching *Call Center Coaching *Performance Indexer *Performance Manager Callidus PERFORM Goal Management Quota Management Objective Management Callidus Communicator Callidus Mobile Incentive Management Rewards Management *Executive Compensation Management Performance Compensation & Rewards SPMConnect
Agenda
Recent Business Highlights 1. Financial results Q3 revenues of $18.5 million; recurring 72% versus 64% a year ago New recurring revenues, which exclude maintenance revenues, are up 38% from the prior year 154,000 On-Demand Payees versus 101,000 one year ago Reduced non-gaap operating expenses by $6.6 million in 9 months of 2010 compared to same period last year Achieved 1 st quarter of Non-GAAP operating profit under new business model 2. Billings defined by recurring revenue plus the change in deferred, totaled $12.8M in Q3 up over $2.7M or 27% from $10.1M for the same quarter last year 3. Announced launch of new Sales Coaching solution powered by ForceLogix. Through this offering we can now enable businesses to coach and optimize their sales force s execution as part of a comprehensive SPM solution. 4. Announced launch of Callidus Sales Recruiting. The new solution now enables businesses to target, communicate with, and on-board sales professionals and independent channel partners as part of a comprehensive sales performance management solution.
Recurring Revenue Trends (a) As % of total revenues (a) Q3 Recurring 72% vs. 64% a year ago, YTD Recurring 75% vs. 55% a year ago
Deferred and Recurring Revenue Trends
EBITDA Progress Since Announcing Business Model Change to Recurring Revenue
The Investment Opportunity Large Untapped Market Opportunity Market Leading Position Strong Reference-able Customer Base Real Barriers to Entry Significant Recurring Revenue Growth Improving Bottom Line and Strong Balance Sheet