Cxense ASA Q3 2018 9 November 2018 www.cxense.com Cxense at a - - PowerPoint PPT Presentation

▶
cxense asa q3 2018
SMART_READER_LITE
LIVE PREVIEW

Cxense ASA Q3 2018 9 November 2018 www.cxense.com Cxense at a - - PowerPoint PPT Presentation

Jan 14, 2023 35 likes •336 views

Cxense ASA Q3 2018 9 November 2018 www.cxense.com Cxense at a glance Sector Software-as-a-Service (SaaS) Product Data Management and Personalization Software Value proposition Real-time audience insight, increased online engagement and

slide-1
SLIDE 1

www.cxense.com

9 November 2018

Cxense ASA – Q3 2018

slide-2
SLIDE 2

www.cxense.com

Sector Product Value proposition Customers Data processing footprint Offices Share ticker

2

Cxense at a glance

Software-as-a-Service (SaaS) Data Management and Personalization Software Real-time audience insight, increased online engagement and digital revenue growth ~190 publishers and ecommerce companies 2bn devices, 19bn sessions per quarter Oslo (HQ), Berlin, Samara, New York, Buenos Aires, Tokyo, Singapore OSE:CXENSE

slide-3
SLIDE 3

www.cxense.com

Data is your most valuable resource

The future of Media, Marketing and eCommerce

3

1-1 Personalization Present Targeted 2010s Digital 2000s Mass Marketing 1990s

slide-4
SLIDE 4

www.cxense.com

4

We enable customers with a leading DMP with intelligent personalization

Data fusion

Track behavior and integrate with internal/external data sources to get a 360 view of each user

Data intelligence

Enrich known data with AI modelling to create rich user profiles and segments

Data activation

Real-time 1:1 personalization Data driven ROI

Content Subscriptions Products Advertising Web Apps CRM Commerce Panel Survey 3rd party

Gender – Age Location Look-alike Behavior CRM data Device Subscription propensity Interests

Deterministic data AI modelled data

slide-5
SLIDE 5

www.cxense.com

ROI increase for both Publishers and Advertisers

Without targeting

  • Ad is shown to 200k high

income and 800K low income

  • Publisher gets 10 000€
  • The advertiser’s cost for

reaching high income is 50€ CPM (10/200*1000)

With premium segment

  • Ad is shown to 750K high

income and 250K low income

  • Publisher get 13 000€
  • The advertiser’s cost for

reaching high income is 17€ CPM (13/750*1000)

Premium segments provide ad targeting to AI modelled audiences such as ”High income”, “Children 7-12y”, “Automotive”, “Health/fitness” Example

  • An advertiser wants to promote a product to the “high income”

segment, with an impression goal of 1 million

  • 10€ CPM* without targeting / 13€ CPM* with premium segments
  • Distribution of high/low income audience on publisher is 20% / 80%
  • Prediction accuracy for the “high income” segment is 75%

5 * CPM = Cost per mille (cost per thousand impressions)

slide-6
SLIDE 6

www.cxense.com

3.4 4.0

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 Q3'18

  • Growth for core DMP and Personalization segment
  • 19% YoY and 3% sequentially
  • 15 new contracts including leading Asian media companies Singapore

Press Holdings, Mainichi and Star Media Group

  • High churn driven by loss of one large customer
  • New leadership team, including CTO, CPO and CCO, successfully
  • nboarded
  • New CFO hired (starting December 2018)
  • 80% reported gross margin, up 1 pp from Q2 2018
  • Adjusted EBITDA of USD -0.47 million compared to USD -2.1 million in

Q3 2017

  • Reported EBITDA impacted by Enreach integration costs
  • Positive cash flow in the quarter
  • Cash position of USD 4.4 million, up 8% from end of Q2 2018, driven

by working capital movements

  • Funded through break-even with ongoing churn improvement program

and cost reductions

  • The new Conversion Engine and DMP features strengthens pipeline
  • Positive outlook for new sales in Q4

Quarterly revenue development

USD million Data Management and Personalization license revenues Consulting revenues

6

Q3 2018 highlights

slide-7
SLIDE 7

www.cxense.com

Financials

7

slide-8
SLIDE 8

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

8

Building recurring revenue base to drive growth

slide-9
SLIDE 9

www.cxense.com

3.4 4.0

0.9 0.7 0.1 0.7 0.4

Q3'17 Q3'18

Core business grew 19% Y/Y

Core business: DMP & Personalization

  • Growth in core on demand from publishers and

marketers

  • 19% y/y net growth from;
  • +45% gross organic growth from new revenue
  • +4% from acquired growth
  • 5% contribution from other
  • 25% reduction from lost recurring revenue (churn)
  • Customer retention a key priority
  • Non-core business:
  • Advertising divestment ongoing
  • Video portfolio to remain in Cxense as bids came

in below expected future cash flow

Advertising DMP & Personalization 5.1 Video 5.1

Revenues

USD million

9

Core Non core Mporium

slide-10
SLIDE 10

www.cxense.com

282 366 335 316 229 (92) (187) (219) (199) (253) 190 179 116 117 (25)

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

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.

Q3 sales update

  • Closed 15 new contracts for DMP and

Personalization

  • New QRR of USD 229 thousand
  • 32% of new QRR was from upsell to

existing customers

  • 9 average sales reps in Q3 (11.5 in Q2)
  • Sales efficiency down 7% Q/Q due to

seasonal effects

  • 10 sales reps at end of October
  • Lost QRR of USD 253 thousand
  • 1/3 of churn related to one customer, a

subsidiary having to implement a group- wide solution

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

USD thousand

10

Strong sales efficiency – high churn driven by one large customer loss

1/3 related to

  • ne customer
slide-11
SLIDE 11

www.cxense.com

Singapore Press Holdings is home to some of Asia's most influential and well-known publications. SPH will implement Conversion Engine to grow subscription revenues Star Media Group is one of the largest media companies in Malaysia Star Media Group has decided to use the Cxense DMP with Intelligent Personalization to help transform their raw data into valuable resource

11

Selected contracts signed in Q3 2018

Mainichi Shimbun is one of the largest publishing companies in Japan Mainichi will upgrade Cxense DMP and implement Conversion Engine to grow subscription revenues

slide-12
SLIDE 12

www.cxense.com

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

Gross margin development

% of Revenue

  • Q3’18 gross margin of 80%
  • Increase of 1 ppt from Q2’18
  • Cxense invested in a second EU data center in Q2’18
  • Adds 33% core hosting capacity – 83% gross margin

potential compared to current 80%

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

centers

Potential with new DC: 83%

12

Gross margin increase in Q3

Long term margin improvement potential

slide-13
SLIDE 13

www.cxense.com

13

Adjusted EBITDA increase – on track to realize integration cost synergies

  • Sequential adjusted EBITDA improvement as a result of gross

margin increase and integration cost synergies

  • Q3’18 adjusted EBITDA of USD -0.5 million, adjusted for 0.7 million

integration cost and non-IFRS adjustments

  • USD 0.4 million integration and office cost provisions
  • USD 0.3 million share based payments and one-off receivable

write-down

  • On track to achieve targeted integration cost synergies
  • Adjusted OPEX down 6% Q-o-Q
  • More than half of the targeted ~10% reduction by end of

Q1’19 realized

Key figures

USD 1,000 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 DMP & Intelligent personalization 3,357 3,617 3,816 3,875 3,993 SaaS Non-Core 1,699 1,530 1,423 1,243 1,077 Revenues 5,055 5,148 5,239 5,118 5,070 Gross margin 77% 80% 81% 79% 80% OPEX 7,476 5,074 4,661 4,544 5,230 Non-IFRS OPEX adjustments (1,464) (253) (215) 259 (723) OPEX adjusted 6,012 4,821 4,446 4,803 4,507 EBITDA (3,567) (931) (420) (518) (1,191) EBITDA adjusted (2,103) (678) (204) (777) (468)

slide-14
SLIDE 14

www.cxense.com

  • USD 4.4 million of cash at period end, up 8% from Q2’18
  • Driven by reduction of working capital after build-up in previous

quarter

  • Funded through break-even with ongoing churn improvement

program and the integration cost synergies

14

Positive cash flow in Q3’18

Cash flow summary

slide-15
SLIDE 15

www.cxense.com

Operations and strategy

15

slide-16
SLIDE 16

www.cxense.com

Sharpen technology vision

  • Focus on core product growth
  • Strengthened product offering in

areas with clear customer traction

  • Enreach (13 joint cases

before acquisition)

  • Conversion Engine (WSJ

collaboration)

  • Extended machine learning

capabilities

CEO – One year at Cxense

New and profitable growth trajectory Refine go-to-market model

  • Global rollout of Conversion

Engine and Enreach

  • Same product offering in all

regions

  • Customer retention increase

through:

  • Larger accounts
  • Better implementations

New and profitable growth trajectory

16

New leadership team

  • International experience from

relevant companies

  • Fresh perspectives and

strengthened competencies

  • Agile, customer-driven

product development

  • B2B solution sales
  • Improved execution power
slide-17
SLIDE 17

www.cxense.com

May June July August September October November

Commercialization of Conversion Engine generating revenue

Customer driven development and commercialization

  • f Cxense Conversion Engine

Proven, world-class solution developed with The Wall Street Journal

2017 WSJ re-invents its pay model with new user-centric solution based on Cxense software 2018 2016 WSJ wins Axel Springer paid content award for pioneering digital subscriptions Strong market interest and several leads in pipeline Conversion Engine

  • fficially introduced

as standalone service First publisher signs up for Conversion Engine Productizing v2 of Conversion Engine for general availability

17

slide-18
SLIDE 18

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

18

Our offering targets high-growth markets

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

slide-19
SLIDE 19

www.cxense.com

Growth opportunities beyond Publishing

Solid core offering:

  • 1. DMP for Publishers
  • 2. Personalization for Publishers

RETAIN DEVELOP

Existing products New products

HOW TO WIN

Publishing Digital Marketing

WHERE TO PLAY 5 8 7 6 4 3 2 1 Recent product extensions:

  • 3. New DMP capabilities (Enreach)
  • 4. Subscription optimization (Conversion Engine)

Unrealized market extensions:

  • 5. Conversion optimization for marketers*

* Industries with long-lasting customer relationships to be approached first, e.g. telecom, finance, gaming/entertainment, other memberships

  • 6. DMP for data alliances
  • 7. DMP for media agencies
  • 8. DMP for marketers*

MONETIZE

Personalization DMP

19

slide-20
SLIDE 20

www.cxense.com

Cxense is well positioned for the data alliances growth

Larger deals with network opportunities

Shared among all Shared bilaterally Private Common data alliance architecture Example customers

20

slide-21
SLIDE 21

www.cxense.com

Strong, international leadership team

Christian P. Halvorsen Chief Executive Officer Pankaj Saharan Chief Technology Officer David Gosen Chief Commercial Officer Ben Graham Chief Product Officer Jørgen Evjen Chief Financial Officer Elisabeth Monrad-Hansen VP of Human Resources

21

slide-22
SLIDE 22

www.cxense.com

Summary and outlook

22

slide-23
SLIDE 23

www.cxense.com

23

  • Growth for core DMP and Personalization segment
  • Adjusted EBITDA of USD -0.47 million and positive cash flow
  • Funded through break-even with ongoing churn improvement program and cost

reductions

  • New leadership team successfully onboarded
  • The new Conversion Engine and DMP features strengthens pipeline
  • Positive outlook for new sales in Q4

Summary and outlook

slide-24
SLIDE 24

www.cxense.com

Appendix

slide-25
SLIDE 25

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)

25

  • 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

slide-26
SLIDE 26

www.cxense.com

USD 1,000 (unaudited) 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 Q3-18 Total SaaS revenues 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 5,070 Where of Advertising 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 1,159 911 861 678 525 407 325 326 Total DMP and Personalization revenue (old segm.) 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 4,802 4,754 4,715 Where of consulting 276 197 210 234 362 161 246 481 293 377 348 278 318 269 367 265 245 212 185 Where of license 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 4,530 Video revenue 967 1,001 1,230 1,224 1,297 1,033 896 875 864 840 801 722 Where of consulting 272 37 115 136 114 73 69 55 43 55 72 55 Where of license 695 964 1,115 1,088 1,183 960 827 820 821 785 729 667 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) 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 3,993 Where of consulting

  • 276

197 210 234 362 161 246 209 256 220 212 164 245 200 312 222 190 140 130 Where of license 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 3,863 growth q/q

  • 11 %
  • 6 %

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

  • 12 %

38 % 10 % 4 % 4 % 16 % 5 % 2 % 2 % 5 % 8 % 5 % 2 % 3 % 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 % 19 %

26

Core business – historical revenue development

slide-27
SLIDE 27

www.cxense.com

27

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

New QRR Lost QRR 282 366 335 316 229 (92) (187) (219) (199) (253) Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 235 408 437 434 381 (206) (182) (274) (262) (138) Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 *Includes USD 48k in acquired revenue (Enreach) *

Closed and notified terminated compared to P&L effect

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

slide-28
SLIDE 28

www.cxense.com

28

SaaS segment – P&L

USD 1,000 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS SaaS segment DMP with Intelligent Personalization (CORE) 2,930 3,066 3,130 3,188 3,357 3,617 3,816 3,875 3,993 Advertising (Non-core) 1,216 1,159 911 861 678 525 436 364 355 mporium (Non-core) 141 132 136 131 146 141 147 77

  • Video (Non-core)

1,224 1,297 1,033 896 875 864 840 801 722 Revenues total 5,511 5,654 5,209 5,077 5,055 5,147 5,239 5,118 5,070 Cost of sales 1,252 1,195 1,361 1,321 1,146 1,005 997 1,091 1,031 Gross profit 4,259 4,460 3,848 3,756 3,909 4,143 4,242 4,027 4,039 Gross margin % 77 % 79 % 74 % 74 % 77 % 80 % 81 % 79 % 80 % Personnel 4,141 4,574 4,402 5,826 5,305 3,018 2,505 2,474 2,931 Other OPEX 1,772 2,258 2,088 2,284 2,170 2,056 2,156 2,070 2,299 OPEX 5,913 6,832 6,490 8,110 7,476 5,074 4,661 4,544 5,230 EBITDA (1,654) (2,374) (2,642) (4,354) (3,567) (931) (420) (518) (1,191) Non-IFRS adjustment of OPEX level Share-based payment costs 149 191 244 239 (32) (18) (4) 39 115 Share-based social costs provision Commission accrual reversals (343) Restructuring costs and provisions 1,280 164 411 Office moving costs 210 (21) 140 103 60 Extraordinary/special 32 585 24 3 One-off provision for doubtful debt 84 142 (2) 137 Transaction costs 78 79 103 58 52 1 77 47 R&D refund (167) Total reported OPEX adjustment items 226 397 358 882 1,464 253 215 (259) 723 OPEX adjusted 5,686 6,435 6,132 7,228 6,012 4,821 4,446 4,803 4,507 EBITDA adjusted (1,428) (1,977) (2,284) (3,472) (2,103) (678) (204) (777) (468) Capitalized operating expense (496) (891) (507) (507) (557) (268) (226) (365) (421) EBITDA adjusted with capitalization add back (1,924) (2,868) (2,791) (3,980) (2,660) (946) (431) (1,142) (889)

slide-29
SLIDE 29

www.cxense.com

29

Revenue bridge for SaaS- and core DMP and personalization segment

Quarterly figures (unaudited) Total revenue DMP and personalization revenue USD 1,000 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Revenue in previous quarter 5,077 5,055 5,147 5,239 5,118 3,188 3,357 3,617 3,816 3,875 New recurring license revenue effect 243 468 491 357 333 235 408 437 337 333 Acquired recurring license revenue

  • 97

48

  • 97

48 Divested recurring license revenue

  • (93)

(183)

  • Churn effect

(333) (240) (292) (429) (315) (206) (182) (274) (262) (138) Change in service revenue 97 (102) (21) (33) (27) 111 (89) (33) (50) (10) Change in other variables (121) 69 33 (49) (30) (56) 106 35 (20) (48) Currency effect 92 (10) 64 (63) (57) 85 17 34 (44) (66) Revenue this quarter 5,055 5,147 5,239 5,118 5,070 3,357 3,617 3,816 3,875 3,993 Accumulated currency effect, reversed (95) (85) (149) (86) (29) (60) (77) (111) (67) (1) Outbound revenue currency adjusted 4,960 5,062 5,090 5,033 5,041 3,297 3,540 3,705 3,807 3,992 Q3 run-rate adjustments Full effect of contracts closed until 02 November 2018 (Core) 226 Full effect of known churn until 02 November (Core) (326) DMP & Personalization run-rate revenue after adjustments 3,893 Number of closed contracts in the quarter* 29 30 18 22 15 26 26 18 22 15 Whereof new customers* 19 12 11 12 6 18 12 11 12 6 Whereof upsell* 10 18 7 10 9 8 14 7 10 9 Full QRR effect of contracts notified closed in the period 306 429 335 316 229 282 366 335 316 229 Full QRR effect of contracts notified lost in the period (215) (221) (335) (221) (442) (92) (187) (219) (199) (253) Net 91 208 (0) 95 (213) 191 179 115 117 (25)

*Restated to include only license revenue contracts. Previously also included service and consulting contracts. In Q3 2018, number of new contracts were 15 license contracts and 2 service and consulting contracts

slide-30
SLIDE 30

www.cxense.com

30

New contracts reflect demand for core offering

  • Closed 15 new contracts on Data

Management & Personalization

  • QRR of USD 229 thousand
  • 9 average sales reps., lower sales

efficiency on seasonal effects

  • 60% of contracts were upsell on

existing customers

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

# of new core contracts and average contract size*

*Restated to include only license revenue contracts. Previously also included service and consulting contracts. In Q3 2018, number of new contracts were 15 license contracts and 2 service and consulting contracts