The Future of Digital Advertising Neil Nguyen CEO & President Ken Saunders CFO March 2015
Risks and Uncertainties Cautionary Note Regarding Forward-Looking Statements Statements contained herein regarding our current expectations, estimates and projections about our operations, industry, financial condition, performance, results of operations, and liquidity constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical fact (including statements containing the words believes, plans, anticipates, expects, estimates and similar expressions) should also be considered forward-looking statements. There are a number of important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including: our ability to further identify, develop and achieve commercial success for new online products; delays in product offerings; the development and pricing of competing online services and products; consolidation of the digital industry and of digital advertising networks; slower than expected development of the digital advertising market; our ability to protect our proprietary technologies; integrating our acquisitions with our operations, systems, personnel and technologies; security threats to our computer networks; operating in a variety of foreign jurisdictions; fluctuations in currency exchange rates; adaption to new, changing, and competitive technologies; potential additional impairment of our goodwill and potential impairment of our other long-lived assets; our ability to achieve some or all of the expected benefits of the spin-off and merger transaction and the other risks and uncertainties that affect our business, including those described in our filings with the Securities and Exchange Commission. In addition, any forward-looking statements represent our estimates only as of the date hereof and should not be relied upon as representing our estimates as of any subsequent date. We disclaim any intention or obligation to update the forward-looking statements to reflect subsequent events or circumstances or update the reasons that actual results could differ materially from those anticipated in the forward-looking statements, except as required by law. 2
Global Campaign Management Platform Who we are Headquartered in Austin, TX Over 900 Employees in 25 offices world-wide Half our revenues outside North America Servicing over 13,000 brands Over 1.4 trillion impressions served per year 3
Agency/Advertiser Ad Platform Advertisers Agencies Channels/Publishers Consumers Display CAMPAIGN MANAGEMENT Media Agency MEDIA CHANNELS Video MEDIA DECISIONING/BUYING DATA COLLECTION Creative Agency ANALYTICS ADVANCED DATA Networks Social/ Mobile INFRASTRUCTURE 4
The Problem Accelerated Growth of Point Solutions Advertisers need Holistic View into Performance & ROI Wasted Delivery & Fraud 73 % of advertisers work with up to 20 vendors to execute their campaigns Lack of Media Independent Providers 5
Sizmek Solves the Problem End-to-End Platform with Value Add Services Integrated with over 65 point solutions, vendors and DSPs globally. Open Platform lets Advertisers work with their Solution of Choice Pre-and-Post Impression Quality and Analysis Improve ROI Over 13,000 brands and 5,000 Media Agencies use our Platform. World s Largest Global Independent End-to-End Platform 6
Global Advertising Market Total Digital Spend (excl search) $55B 13% CAGR 14-18 Total Advertising Spend $544.4B 5% CAGR 14-18 Growing Sizmek TPM Sizmek TAM $1.9B Source emarketer May 2014 7
Market Growth Rate Data Total Media Ad Spending Worldwide, 2012-2018 $503.15 $516.20 $545.40 $574.18 $604.77 $633.85 $662.73 US Programmatic Digital Ad Spending, 2013-2014 $4.24 $10.04 $14.88 $20.41 2012 2013 2014 2015 2016 2017 2018 In billions 2013 2014 2015 2016 In billions $416.00 US Mobile Ad Spending, 2009-2014 $743.10 $1,102.40 $1,501.30 $2,036.80 $2,549.50 YouTube Net US Video Ad Revenues, 2013-12014 $0.81 $1.13 $1.51 $1.75 2009 2010 2011 2012 2013 2014 In millions 2013 2014 2015 2016 In billions All Data Source: emarketer 2014 8
Our Platform (MDX) - MultiChannel Advertisers Agencies Channels/Publishers Consumers Display Campaign Management Media Agency Creative SDK Video Ad Serving (all formats) Audience Suite Verification/Viewability Creative Agency Networks Advanced Attribution Dynamic Creative Opt Data Management Social/ Mobile Advanced Analytics 9
Trusted Partners for Leading Brands Apparel Auto CPG Electronics Entertainment Finance Over 13,000 brands use our Platform. 10
Trusted Partners to Global Agencies Over 5,000 Media Agencies use our Platform. 11
We re Open Over 65 Partners integrated globally Categories: Analytics, Billing, Brand Survey, Creative, data, DSP, Mobile, Privacy, Retail Data, SEM, Social, AdNetwork, Exchange, SSP 12
Competitive Landscape Global Platforms Point Solutions CAMPAIGN MANAGEMENT MEDIA CHANNELS (Open & Independent) MEDIA DECISIONING/BUYING DATA COLLECTION Google / ANALYTICS ADVANCED DATA Facebook / INFRASTRUCTURE 13
Why Sizmek Wins End-to-End Platform Third-Party Agnostic Integrated Toolset to Increase ROI Open Technology Strategic Service Offerings 14
What's Next o Complete migration of MDX next o Real time o Greater scale o Data Management Platform o Expansion of our Programmatic Suite o Biddable Media solutions o Programmatic Creative o DSP Connect o M&A Philosophy o A complimentary strategy to our platform extension 15
Financial Overview
Highlights o Flash Rich Media now less than 25% of revenues o Core business grew 30% for the full year 2014. o Q4 Growth Areas: o Mobile/Social + 62% o Instream Video +51% o Data-driven products +73% o New products represent industry firsts for neutrality, multi-channel capabilities o $30M share buyback program commenced in Q4 o Positive Cash flow with $90M of cash at year end. 17
2014 Financial Highlights $161M 13% $171M 15% o 6% YOY Growth o Continued strong profitability o Positive cash flow 2013 2014 PF Adj EBITDA Revenue The definition and reconciliation of Pro Forma Adjusted EBITDA can be found in our Q4 2014 Press Release located within the Investor Relations section on our website at Sizmek.com.
Product Growth Trends $180,000 $150,000 $120,000 $90,000 $60,000 Core Products grew 30%, driven by: o o o Video Mobile Data Driven Decision $30,000 $0 2012 2013 2014 100% 80% Core Business Flash Rich Media 60% 40% Core Business represents over 20% 75% of total Revenues in 2014 0% 2012 2013 2014 Core Business Flash Rich Media 19
Geographic Revenues Full Year 2013 Full Year 2014 4% 16% 49% 31% NAM EMEA APAC LATAM 4% 16% 51% 29% Year over Year Revenue Growth Rates 11% - NAM (2%) EMEA 2% - APAC 27% - LATAM 20
Balance Sheet and Cash Flow Highlights ($ in millions) 2013 2014 Cash and short-term investments $ 22.6 $ 90.7 Property and equipment, net $ 26.0 $ 34.0 Goodwill and intangible assets, net $ 134.1 $ 40.2 YTD Operating cash flow from Operations $ 18.7 $ 13.8 Capital expenditures $ 6.3 $ 5.0 Capitalized software development $ 9.6 $ 14.0 21
Investment Highlights o Sizmek is the only independent global ad management platform within digital advertising ecosystem. o Business model focused on profitable growth. o Solid balance sheet: o Over $90 million of cash o Global technology platform leverageable for growth. o M&A focused on platform enhancement and market expansion. o 2015 Guidance: $178-183M Revenue, Core Business to Grown 24-25%, EBITDA $24-26M. o $30M share repurchase in place 22
FREEDOM OF CHOICE END-TO-END CAPABILITIES EXPONENTIAL PERFORMANCE That s Open Ad Management That s the Sizmek Effect
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