Cxense ASA Q2 2018 22 August 2018 www.cxense.com Cxense at a - - PowerPoint PPT Presentation

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Cxense ASA Q2 2018 22 August 2018 www.cxense.com Cxense at a - - PowerPoint PPT Presentation

Jan 12, 2024 112 likes •404 views

Cxense ASA Q2 2018 22 August 2018 www.cxense.com Cxense at a glance Sector Software-as-a-Service (SaaS) Product Data Management and Personalization Software Value proposition Increasing online engagement and revenue from digital

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www.cxense.com

22 August 2018

Cxense ASA – Q2 2018

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www.cxense.com

Sector Software-as-a-Service (SaaS) Product Data Management and Personalization Software Value proposition Increasing online engagement and revenue from digital channels Customers ~180 publishers and ecommerce companies Data processing footprint 2bn devices, 19bn sessions per quarter Offices Oslo (HQ), Samara, New York, Buenos Aires, Tokyo, Singapore Share ticker OSE:CXENSE

2

Cxense at a glance

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www.cxense.com

3.2 3.9

Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18

  • Strong growth for core DMP and Personalization segment
  • 22% YoY and 2% sequentially
  • 44% gross growth, partly offset by churn
  • Churn declined from previous quarter, however still above

long-term target

  • Strengthened product offering
  • Improved DMP post Enreach acquisition
  • Strong interest for the new Conversion Engine
  • Strong international leadership team in place with

appointment of new CTO, CPO and CCO

  • 79% reported gross margin
  • Impacted by investment in EU based data center increasing

hosting capacity by 33%

  • Q2 2018 EBITDA of USD -0.5 million
  • Funded through break-even
  • Churn improvement program and cost reductions ongoing

Quarterly revenue development

USD million Data Management and Personalization license revenues Consulting revenues

3

Q2 2018 highlights

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www.cxense.com

Data is your most valuable resource

The future of Media & Publishing, eCommerce & Retail

4

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www.cxense.com

Core market Adjacent market

  • pportunities

DMP for Publishers / Ad networks Content Recommendation Engines Global Intelligence Platforms Digital Marketing Software E-commerce ~0.7 ~3.8 ~5.8 33 2,300 16% 17% 18% 16% 23% Market size USD billion Growth CAGR Segment Description

5

Our offering targets high-growth markets

Sources: Markets&Markets.com, Marketprognis.com, Persistence Market Research, Forrester

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www.cxense.com

Unique user tracking Rich user profiles & segmentation Real-time personalization 1 2 3

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We enable customers with a leading DMP with intelligent personalization

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www.cxense.com

  • Creates a stronger DMP with significantly

improved feature set

  • Improved socio-demographic and interest-based

segment creation

  • Audience insight on advertiser’s own website with

Audience Radar

  • Automated campaign reports on targeted audience
  • Continued strong interest in EMEA
  • Commercial launch in Japan after product

adaptation

Ongoing Cxense and Enreach integration and global rollout

7

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www.cxense.com

  • Subscription revenues increasingly

important for publishers

  • Proven, world-class solution developed with

WSJ

  • Strong market interest: First new customer

signed, several in the pipeline

  • Official launch together with WSJ on Sept 5
  • Sign up here

Strong market interest for Conversion Engine – Market launch imminent

8

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www.cxense.com

International digital marketing agency based in Vienna and Malta with main focus on betting. E2 chose Cxense DMP to sell better audience segments to their advertising partners. Danish Broadcasting Corporation (DR) DR has expanded its use of the Cxense DMP and Personalization solution to give readers a personalized experience on their

  • nline sites and apps.

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Selected contracts signed in Q2 2018

One of the largest publishers in Czech Republic VLMedia will deploy a wide range

  • f Cxense solutions including

Insight, DMP for Advertising (with Enreach capabilities) and Conversion Engine

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www.cxense.com

Ben Graham Chief Product Officer (CPO) August 2018 David Gosen Chief Commercial Officer (CCO) August 2018 Pankaj Saharan Chief Technology Officer (CTO) July 2018

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Strong international leadership team in place

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www.cxense.com

https://www.cxense.com/insights-lab/obstacle-opportunity-cxense-commitment-gdpr

Cxense welcomes changing regulatory environment and the General Data Protection Regulation (GDPR)

11

  • EU regulation implemented on 25

May 2018

  • Strengthened data protection for all

EU and EEA citizen No financial impact from GDPR so far 1st party data DMPs, such as Cxense, strengthened over 3rd party data DMPs since implementation of GDPR

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www.cxense.com

Financials

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www.cxense.com

Last recurring revenue Churn New Revenue New recurring revenue Upsell existing customers New customers Lost customers

Cxense’s SaaS recurring revenue business model

Illustrative

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Building recurring revenue base to drive growth

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www.cxense.com

3.2 3.9

0.9 0.8 0.1 0.1 0.9 0.4

Q2'17 Q2'18

Core business grew 22% Y/Y

Core business: DMP & Personalization

  • Strong interest for our DMP & Personalization solution

from publishers and marketers

  • 22% y/y net growth from;
  • +44% gross organic growth from new revenue
  • +3% from acquired growth
  • +3% contribution from other
  • -28% reduction from lost recurring revenue (churn)
  • Existing customer retention is a key priority

going forward

  • Ongoing divestments of non-core business

Advertising mporium DMP & Personalization 5.1 Video 5.1

Revenues

USD million

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Core Non core

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www.cxense.com

272 282 366 335 316 (170) (92) (187) (219) (199) 102 190 179 116 117

Q2'17 Q3'17 Q4'17 Q1'18 Q2'18

Lost QRR Net new QRR New QRR *Full recurring revenue value of contracts closed and terminated in the period. For comparison to effect in reported figures see appendix.

Q2 2018 update Closed 25 new contracts on Data Management & Personalization New QRR of USD 316 thousand 22% of new MRR was from upsell to existing customers High sales efficiency with 11.5 average sales reps. Lost QRR of USD 199 thousand, down 9% sequentially

DMP & Personalization – new and lost quarterly recurring revenue (QRR) – value of closed an terminated contracts in the period*

USD thousand

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Strong sales efficiency but churn remains high in Q2 2018

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www.cxense.com

74% 74% 77% 80% 81% 79% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018

Gross margin development

% of Revenue

  • In Q2’18 Cxense invested in a second EU data center
  • USD 400k investment
  • USD 27k monthly costs

Benefits:

  • Adds 33% core hosting capacity – 83% gross

margin potential compared to current 79%

  • Simplifies GDPR compliance, enabling Cxense to
  • ffer EU-only hosting
  • Improved redundancy setup with 4 instead of 3 data

centers

Potential with new DC: 83%

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Short term gross margin dip due to new data center

Long term margin improvement potential

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www.cxense.com

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317 476 630 2 000 4 000 6 000 8 000 Enreach full effect and

  • ther known

changes Cash cost* USD thousand Cash cost run-rate Q2 ’18 cash cost Target planned initiatives (Next 6 mo) Cash cost run rate adjusted 5 869 6 259 85 5 942 5 714 Enreach acquisition

  • Excl. Acquisition

* Cash cost = Reported CoS + OPEX + Capitalized R&D

6 345

  • Cost reduction initiatives primarily related

to the Cxense – Enreach integration project

  • Realized by end of Q1’19
  • USD 0.4-0.6 million restructuring

costs

  • The Cxense – Enreach integration will

deliver a more efficient DMP development team and a DMP software with significantly enhanced features

Enreach integration synergies will reduce costs by ~10%

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www.cxense.com

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Q2‘18 cash spend beyond operational burn rate

Positive cash flow after reporting period due to working capital recovery

Cash position 31 March 2018 7.7

EBITDA

  • 0.5

Capitalized R&D

  • 0.4

Cost accrual reversals

  • 0.3

Operational cash burn

  • 1.2

Recoverable working capital changes

  • 1.0

New data center investments

  • 0.3

Severance pay, etc.

  • 0.3

Enreach working capital funding

  • 0.4

PAN Spain funding

  • 0.2

Other

  • 0.3

Investments and one offs

  • 1.4

Cash position 30 June 2018 4.1

  • Est. Operational cash burn
  • 0.7

Working capital recovery 1.4 Cash position 20 August 2018 4.8

Q2’18 changes in cash

USD million Working capital recovery in July and August leads to positive post quarter cash flow Recoverable in 2H 2018 Relates predominantly to changes in receivables and customer pre-payments. Additional 1.4 million recoverable from Q1 Significant investment adding 33% hosting capacity

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www.cxense.com

Summary and outlook

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www.cxense.com

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David Gosen – Chief Commercial Officer

Previous Company Roles: Sizmek, Rocket Fuel, Nielsen and Microsoft

Some early observations

  • Enthusiastic and passionate teams
  • Impressive platform and API technology
  • Strong product roadmap
  • Encouraging core growth
  • Powerful client advocacy

Immediate focus areas

  • Double down on churn prevention
  • Accelerate the new sales process
  • Drive new business growth with Conversion

Engine launch

  • Increase Cxense market presence
  • Re-enforce and clarify value to clients
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www.cxense.com

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  • Strong growth for core DMP and Personalization segment
  • Strengthened product offering
  • Strong international leadership team in place
  • Hosting capacity expanded for further growth
  • Q2 2018 EBITDA of USD -0.5 million
  • Funded through break-even

Summary and outlook

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www.cxense.com

Appendix

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www.cxense.com

USD 1,000 (unaudited) Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18 Q2-18 Total SaaS revenues 503 674 736 840 993 1,090 2,650 3,568 3,442 3,530 3,590 3,301 2,954 4,183 5,291 5,467 5,381 5,511 5,654 5,209 5,077 5,055 5,148 5,239 5,118 Where of Advertising 83 301 384 384 369 374 1,762 2,439 2,202 2,074 2,046 1,558 1,347 1,920 1,847 1,900 1,448 1,216 1,159 911 861 678 525 436 325 Total DMP and Personalization revenue (old segm.) 420 373 352 456 624 716 888 1,129 1,240 1,456 1,544 1,743 1,607 2,263 3,444 3,566 3,933 4,295 4,495 4,299 4,215 4,378 4,622 4,803 4,754 Where of consulting 276 197 210 234 362 161 246 481 293 377 348 278 318 269 367 265 245 212 Where of license 420 373 352 456 624 716 888 853 1,043 1,246 1,310 1,381 1,446 2,017 2,963 3,273 3,556 3,947 4,217 3,981 3,946 4,011 4,357 4,557 4,542 Video revenue 967 1,001 1,230 1,224 1,297 1,033 896 875 864 840 801 Where of consulting 272 37 115 136 114 73 69 55 43 55 72 Where of license 695 964 1,115 1,088 1,183 960 827 820 821 785 729 Mporium 74 148 142 136 185 141 132 136 131 146 141 147 77 Where of consulting 42 Where of license 76 148 142 136 143 141 132 136 131 146 141 147 77 Total DMP and Personalization revenue (CORE) 420 373 352 456 624 716 888 1,129 1,240 1,456 1,544 1,743 1,533 2,115 2,335 2,429 2,518 2,930 3,066 3,130 3,188 3,357 3,617 3,816 3,875 Where of consulting

  • 276

197 210 234 362 161 246 209 256 220 212 164 245 200 312 222 190 140 Where of license 420 373 352 456 624 716 888 853 1,043 1,246 1,310 1,381 1,370 1,869 2,126 2,173 2,298 2,718 2,902 2,885 2,988 3,045 3,395 3,626 3,736 growth q/q 8%

  • 11%
  • 6%

30% 37% 15% 24% 27% 10% 17% 6% 13%

  • 12%

38% 10% 4% 4% 16% 5% 2% 2% 5% 8% 5% 2% growth y/y 17% 49% 92% 152% 148% 99% 103% 74% 54% 24% 45% 51% 39% 64% 39% 31% 29% 27% 15% 18% 22% 22%

23

Core business – historical revenue development

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www.cxense.com

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Closed and terminated in the period – USD thousand Effect in reported figures – USD thousand

New QRR Lost QRR 272 282 366 335 316 (170) (92) (187) (219) (199) Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 275 235 408 437 434 (150) (206) (182) (274) (262) Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 *Includes USD 97k in acquired revenue (Enreach) *

Closed and notified terminated compared to P&L effect

DMP & Personalization – new and lost quarterly recurring revenue (QRR)

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www.cxense.com USD 1,000 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS SaaS segment DMP with Intelligent Personalization 2,518 2,930 3,066 3,130 3,188 3,357 3,617 3,816 3,875 Advertising 1,448 1,216 1,159 911 861 678 525 436 364 mporium 185 141 132 136 131 146 141 147 77 Video 1,230 1,224 1,297 1,033 896 875 864 840 801 Revenues total 5,381 5,511 5,654 5,209 5,077 5,055 5,147 5,239 5,118 Cost of sales 967 1,252 1,195 1,361 1,321 1,146 1,005 997 1,091 Gross profit 4,414 4,259 4,460 3,848 3,756 3,909 4,143 4,242 4,027 Gross margin % 82 % 77 % 79 % 74 % 74 % 77 % 80 % 81 % 79 % Personnel 3,675 4,141 4,574 4,402 5,826 5,305 3,018 2,505 2,474 Other OPEX 1,915 1,772 2,258 2,088 2,284 2,170 2,056 2,156 2,070 OPEX 5,590 5,913 6,832 6,490 8,110 7,476 5,074 4,661 4,544 EBITDA (1,176) (1,654) (2,374) (2,642) (4,354) (3,567) (931) (420) (518) Non-IFRS adjustment of OPEX level Share-based payment costs 56 149 191 244 239 (32) (18) (4) 39 Share-based social costs provision 54 Commission accrual reversals (343) Salary and social restructuring provisions/costs 1,280 164 Office moving and restructuring costs 210 (21) 140 103 Extraordinary/special 32 585 24 3 One-off provision for doubtful debt 55 84 142 (2) Transaction costs 81 78 79 103 58 52 1 77 47 R&D refund (42) (167) Total reported OPEX adjustment items 204 226 397 358 882 1,464 253 215 (259) Estimated full effect of cost-reduction program OPEX adjusted 5,386 5,686 6,435 6,132 7,228 6,012 4,821 4,446 4,803 EBITDA adjusted (972) (1,428) (1,977) (2,284) (3,472) (2,103) (678) (204) (777) Capitalized operating expense (494) (496) (891) (507) (507) (557) (268) (226) (365) EBITDA adjusted with capitalization add back (1,466) (1,924) (2,868) (2,791) (3,980) (2,660) (946) (431) (1,142)

25

SaaS segment – P&L

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www.cxense.com

Quarterly figures (unaudited) Total revenue DMP and personalization revenue USD 1,000

Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018

Revenue in previous quarter

5,209 5,077 5,055 5,147 5,239 3,130 3,188 3,357 3,617 3,816

New recurring license revenue effect

275 243 468 491 357 275 235 408 437 337

Acquired recurring license revenue

  • 97
  • 97

Divested recurring license revenue

  • (93)

(183)

  • Churn effect

(385) (333) (240) (292) (429) (150) (206) (182) (274) (262)

Change in service revenue

(49) 97 (102) (21) (33) (45) 111 (89) (33) (50)

Change in other variables

(25) (121) 69 33 (49) (62) (56) 106 35 (20)

Currency effect

52 92 (10) 64 (63) 40 85 17 34 (44)

Revenue this quarter

5,077 5,055 5,147 5,239 5,118 3,188 3,357 3,617 3,816 3,875

Accumulated currency effect, reversed

(3) (95) (85) (149) (86) 25 (60) (77) (111) (67)

Outbound revenue currency adjusted

5,074 4,960 5,062 5,090 5,033 3,213 3,297 3,540 3,705 3,807

Q1 run-rate adjustments Full effect of contracts closed until 20 August 2018 (Core)

331

Full effect of known churn until 20 August 2018 (Core)

(294)

DMP & Personalization run-rate revenue after adjustments

3,911

Number of closed contracts in the quarter

25 29 30 22 32 23 26 26 22 31

Whereof new customers

17 19 11 11 12 17 18 11 11 12

Whereof upsell

8 10 19 11 20 6 8 15 11 19

Full QRR effect of contracts notified closed in the period

274 306 429 335 316 272 282 366 335 316

Full QRR effect of contracts notified lost in the period

(399) (215) (221) (335) (221) (170) (92) (187) (219) (199)

Net

(126) 91 208 (0) 95 102 191 179 115 117

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Revenue bridge for SaaS- and core DMP and personalization segment

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www.cxense.com

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New contracts reflect demand for core offering

  • Closed 25 new contracts on Data

Management & Personalization

  • QRR of USD 316 thousand
  • High sales efficiency with 11.5 average

sales reps.

  • 40% of contracts were upsell on

existing customers

32 24 37 30 23 26 26 22 25 19 9 14 14 12 11 14 15 13 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 # new SaaS contracts for DMP and Personalization segment Average QRR per new contract (USD k)

# of new core contracts and average contract size