Q1 2017 results 10 May 2017 www.cxense.com Cxense is a - - PowerPoint PPT Presentation

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Q1 2017 results 10 May 2017 www.cxense.com Cxense is a - - PowerPoint PPT Presentation

Q1 2017 results 10 May 2017 www.cxense.com Cxense is a Software-as-a-Service (SaaS) company Business model: Cxense offering: Customers: Cxenses customers subscribe for Data Companies management & software and services that they can


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www.cxense.com

Q1 2017 results

10 May 2017

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www.cxense.com

Recurring revenues and gross margin >80% | Organization of ~170 employees in Europe, North and South America, and Asia | Listed on Oslo Børs

Cxense is a Software-as-a-Service (SaaS) company

Cxense offering: Data management & personalization software Customers: Companies with sites and apps across the world Business model: Cxense’s customers subscribe for software and services that they can access in the cloud and pay a monthly fee

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www.cxense.com

  • Data management and personalization up 21% year-
  • ver-year
  • High Q1 churn driven by one large acquired video

customer and continued decline of advertising portfolio

  • Group revenue down year-over-year due to churn
  • Ramp-up of sales team in North America on track –

reflected in growing lead pipeline

  • Strategic investments in partners mporium and

RepKnight to strengthen Cxense’s offering, distribution and sales

Highlights Q1 report

3,6 3,9 4,3 4,5 4,3 1,9 1,4 1,2 1,2 0,9 0,8 1,0 0,8 0,9 0,7 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Data management & personalization software Advertising software PCAN Cxense revenue overview USD million

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www.cxense.com

13,2 15,2 16,3 17,0 Q2'16 Q3'16 Q4'16 Q1'17

  • Segment represented all new recurring

revenue contracts in Q1’17

  • Continued long-term positive

momentum despite high churn in the quarter

  • Rapidly growing market

Underlying data management and personalization growth

Ad Network / Programmatic = The PCAN segment Advertising Software and Personalization and Data Management = The SaaS segment

Rolling 12-month data management and personalization revenue

USD million

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www.cxense.com

Content Promotions Personalized Product Offerings Emails & newsletters Display Ads Push notifications

People expect relevant and engaging

  • nline experiences

Consumers want personalization

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www.cxense.com

Personalization makes it easy

  • Easy for people to

find and consume what they want

  • Easy for people to

consume when they want it

Personalized content, advertising and product offering 6

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www.cxense.com

Cxense’s software helps customers…

…personalize news sites and increase revenue from ads …personalize online shopping to increase revenue from online sales …personalize subscription offers and increase subscription revenue

…increase revenue from websites and apps

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www.cxense.com

All new contracts in Q1 for data management and personalization software

11 14 11 7 11 21 22 34 31 37 31 41 37 35 26 39 30

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

# of new SaaS contracts

All Q1’17 contracts for data management & personalization software 12 up-sell 18 new customers

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www.cxense.com

Growing customer base and adoption

Cxense customers Q1’17

Media

Publishers and Broadcasters

Sports Consumer brands Financial services e-commerce and classifieds Verticals Time

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www.cxense.com

Powering more than 7,000 sites

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www.cxense.com

>1.8bn devices interacted with Cxense software in Q1’17

Device = Browser with unique history. A user using Opera, Firefox and Chrome on one PC equals 3 devices. Mobile, iPad and so on are devices, as is one PC with several unique logins

200 400 600 800 1000 1200 1400 1600 1800 2000 Q3'11 Q4'11 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 Million 11

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www.cxense.com

Financials

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www.cxense.com

Growing recurring revenues from existing + new customers

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

SaaS recurring revenue business model

Illustrative

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www.cxense.com

3,6 4,3 1,9 0,9 0,8 0,7 6,26 5,92 0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0 Q1'16 Q1'17

  • Group revenues down 5.5% y/y
  • Revenue decrease is primarily driven by

revenue decrease in the advertising software segment

  • Data management and personalization

software growing 21% y/y

  • Now comprise 83% of all software

revenues

Data management and personalization is the main revenue driver

Ad network/ Programmatic, -12% Data management & personalization software, +21% Advertising software, -52%

Revenue

USD million

Ad Network / Programmatic = The PCAN segment Advertising Software and Personalization and Data Management = The SaaS segment

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Strong demand for data management and personalization software

Reported Revenues, USD million Churn effect, USD million 4,30 4,50 4,30 3,90 3,60 Q1 ’16 Q2 ’16 Q3 ’16 Q4 ’16 Q1 ’17

  • 0,42
  • 0,07
  • 0,06
  • 0,09
  • 0,07

0,90 1,20 1,20 1,40 1,90 Q1 ’17 Q3 ’16 Q4 ’16 Q2 ’16 Q1 ’16

  • 0,27
  • 0,06
  • 0,07
  • 0,27
  • 0,09

Personalization and Data Management software Advertising software

  • 21% y/y growth
  • Q1 growth offset by unusually high Q1 ’17 churn led to

sequentual revenue drop

  • One larger Video client account for -0.2 of churn
  • Strong market growth, increasing adoption and solid

customer results

  • The advertising software market is mature and

competition is high

  • Expected to churn to marginal level throughout 2017
  • Relatively less negative impact going forward as the

segment now is relatively small to rest of revenue

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  • 30 new contracts closed in Q1 2017
  • New ARR from closed contracts of USD 1.7

million

  • Strong performance from EMEA team. All sales

reps delivered results

  • On track to increase sales organization to 30

effective sales quotas

Ramping up sales team to increase growth capacity

  • Avg. Sales

Quotas (SQ) per quarter

Q4 Plan

  • Avg. ARR per

SQ per quarter New ARR per quarter

18 30* 0.12

USDm

0.12**

USDm

2.1

USDm

3.5

USDm

  • Plan is to have 30 quotas by beginning of Q3 2017

** Assuming the same sales performance as in Q4 2016

Q1

19 0.09

USDm

1.7

USDm

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75% 73% 70% 70% 66% 83% 82% 77% 79% 74% 19% 18% 16% 12% 12% Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Group SaaS segment PCAN segment

  • Ongoing projects to strengthen SaaS segment gross

margin:

  • Moving hosting capacity from pure lease to co-

location solution

  • Optimizing code and delivery of existing new

data management features

  • Goal to bring SaaS gross margin back above 80%

SaaS is a high gross margin business

Quarterly gross margin

Percent

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  • Q1 2017 EBITDA of USD – 2.9 million compared to USD -2.0

million in Q1 2016

  • Loss increase reflects;
  • Gross margin decrease
  • OPEX increase reflects more sales & marketing

spending

Profit and loss statement

USD 1,000 Q1 2016 Q4 2016 Q1 2017 Revenues 6 263 6 562 5 918 Gross profit 4 717 4 574 3 937 Gross margin 75 % 70 % 67 % OPEX 6 689 7 204 6 848 Non-IFRS OPEX adjustments (659) (397) (358) Estimated full effect of cost-reduction program (525) OPEX adjusted 5 505 6 807 6 490 EBITDA (1 973) (2 629) (2 911) EBITDA adjusted (790) (2 233) (2 553)

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10 35

  • 35

80 100 20 20

SaaS cost model scalability illustration

R&D EBITDA Marketing Account Mngmnt & support ARR* CoS (Hosting cost) Gross Profit Capitalized R&D 10 15 G&A Sales & Impl. 45

*Annualized Recurring Revenue (ARR) ** All cost vouchers are not split by operational department, hence cost break-down is illustrative and in round numbers

Variable costs Economies of scale 50% increase in sales & implementation capcity costs 17.5% of revenue baseline Illustrative**

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www.cxense.com

Q1 2017 cash flow

USD 1,000

21 960 12 805

(3 995) (5 160)

Cash at period start Net cash from

  • perations

Net cash from investing activities Net cash from financing activities Cash at period end

  • Q1 2017 Cash flow from operations of USD -4 million
  • Affected negatively by year-end bonus payments

accrued for in 2016 and paid in Q1 2017.

  • Over time cash flow from operations will be near

EBITDA

  • Cash flow from investing activities of USD -5.2 million
  • USD 4.6 million invested in mporium and RepKnight.
  • Strengthen Cxense’s distribution power and

social media analytics capabilities

  • USD 0.5 million in capitalized R&D expense
  • USD 12.8 million cash position at period end

Cash flow development

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www.cxense.com

Market and strategy

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The big digital shift creates winners and losers…

“The world’s most valuable resource is no longer oil, but data” “Alphabet (Google’s parent company), Amazon, Apple, Facebook and Microsoft—look unstoppable. They are the five most valuable listed firms in the world. Their profits are surging: they collectively racked up over $25bn in net profit in the first quarter of

  • 2017. Amazon captures half of all dollars spent online in
  • America. Google and Facebook accounted for almost all the

revenue growth in digital advertising in America last year.”

The Economist, Print edition | Leaders | May 6th 2017

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www.cxense.com

… and Cxense are among those that help the winners

Feb 2017: Gartner Group included Cxense in its Third Magic Quadrant for Digital Marketing Hubs made up of 22 selected vendors globally Gartner said “marketing leaders need a system that can integrate and coordinate data and activities across channels, devices and contexts, continuously and in real time”. The quadrant provides an overview of vendors from advertising, marketing automation and analytics that deliver personalized digital marketing at scale.

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www.cxense.com

Investing in North America growth

NEW YORK OFFICE BOSTON OFFICE

  • Significant market potential North America
  • Existing high quality penetration in the media/publishing industry

to grow from

  • Ramp-up of sales team in North America on track
  • Growing lead pipeline

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www.cxense.com

mporium Group plc - GBP 0.65 million

  • Strategic partner since initial investment in 2015, holds 21.2% stake
  • Mobile technology managing digital ad campaigns
  • Combined one-stop-shop solution for advertising campaigns targeting mobile

device users RepKnight - GBP 3 million

  • Real-time analytics from Twitter providing Cxense’s clients insight on social media

reach and impressions

  • Combined solution drives customer engagement, increases site traffic and

enables more relevant personalization

  • To increase conversion for publishers and e-commerce companies

Strengthening offering, distribution and adoption

Strategic investments made in Q1 2017 to add capabilities and widen market reach

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Summary and outlook

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  • Data management and personalization up 21% year-over-year
  • Recognition increasing
  • Ramp-up of sales team in North America on track
  • Strategic investments in partners to strengthen Cxense’s offering, distribution and sales
  • Record lead pipeline of sales opportunities

Summary and outlook

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www.cxense.com

Appendix

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www.cxense.com

Key figures

USD 1,000 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Change y/y Data Management & Personalization software 3 566 3 933 4 295 4 495 4 299 21% Advertising software 1 900 1 448 1 216 1 159 911

  • 52%

SaaS segment 5 467 5 381 5 511 5 654 5 209

  • 5%

PCAN segment 837 990 840 938 733

  • 12%

Inter-segment elimination (41) (41) (34) (30) (24) Revenues 6 263 6 330 6 317 6 562 5 918

  • 6%

Gross profit 4 717 4 594 4 394 4 575 3 937

  • 17%

Total gross margin 75 % 73 % 70 % 70 % 67 % Gross margin SaaS segment 83 % 82 % 77 % 79 % 74 % Gross margin PCAN segment 19 % 18 % 16 % 12 % 12 % OPEX 6 689 5 904 6 266 7 204 6 848 2% Non-IFRS OPEX adjustments (659) (204) (226) (397) (358) Estimated full effect of cost-reduction program (525) OPEX adjusted 5 505 5 700 6 040 6 807 6 491 EBITDA (1 972) (1 310) (1 873) (2 629) (2 911)

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www.cxense.com

USD 1,000

369 663 429 384 395 637 240 516 429 446 271 610 413 418 290 514 373 469 (417) (223) (130) (122) (162) (360) (131) (131) (691)

(800) (600) (400) (200) 200 400 600 800 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17

Quarterly Recurring Revenue (QRR) on contracts closed in the quarter New QRR effect in reported figures Lost QRR (churn)

Quarterly new recurring revenue and churn

USD 0.2 million related to one large video customer

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www.cxense.com

Income Statement

USD 1,000 Q1 2017 Q1 2016 Revenue 5 918 6 263 Operating expense Cost of goods sold 1 981 1 546 Employee benefit expense 4 586 4 857 Other operating expense 2 262 1 832 EBITDA (2 911) (1 973) Depreciation & amortization expense 983 865 Net operating income/(loss) (3 894) (2 838) Net financial income/(expense) 76 (171) Share of profit of investments accounted for using the equity method (375) (149) Net Income/(loss) before taxes (4 193) (3 158) Income tax expense 85 27 Net income/(loss) for the period (4 278) (3 185)

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www.cxense.com

Balance sheet

USD 1,000 As at 31 Mar 2017 As at 31 Mar 2016

Non-current assets Goodwill 14 364 14 364 Deferred tax asset 15 37 Intangible assets 11 426 13 061 Office machinery, equipment, etc. 280 314 Investments in associated companies 8 391 4 620 Other financial assets 646 251 Total non-current assets 35 121 32 647 Current assets Trade receivables 3 046 3 725 Other short-term assets 1 382 989 Cash and cash equivalents 12 805 3 072 Total current assets 17 233 7 786 Total Assets 52 354 40 433 Total Equity 44 338 27 035 Non-current liabilities Deferred tax liabilities 674 968 Other provisions 121 Other long-term liabilities 199 2 688 Total non-current liabilities 994 3 657 Non-current liabilities Trade payables 1 403 1 463 Current taxes 178 109 Other short-term liabilities 5 441 8 170 Total current liabilities 7 022 9 742 Total equity and liabilities 52 354 40 433 32

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www.cxense.com

Cash Flow Statement

USD 1,000 Q1 2017 Q1 2016

Cash flow from operating activities Profit/(loss) after income tax (including disposal group) (4 278) (3 185) Adjustments: Income tax payable (110) (93) Share-based payments 242 171 Share of profit of investments accounted for using the equity method 375 149 Depreciation and amortization 983 865 Currency translation effects 210 243 Change in trade receivables 587 (188) Change in trade payables (361) 82 Change in other accrual and non-current items (1 644) (286) Net cash flow from / (used in) op. activities (3 995) (2 241) Cash flow from investing activities Investment in furniture, fixtures and office machines (76) (20) Investment in intangible assets (507) (496) Investment in associated companies (4 577) Investment in subsidiary

  • Net cash effects from disposal subsidiary

Net cash flow from / (used in) investing activities (5 160) (516) Cash flow from financing activities Net proceeds from share issues

  • Proceeds from minority interest
  • Net cash flow from / (used in) financing activities
  • Net increase/ (decrease) in cash and cash equivalents

(9 155) (2 757) 33

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www.cxense.com

THIS PRESENTATION AND ITS ENCLOSURES AND APPENDICES (HEREINAFTER JOINTLY REFERRED TO AS THE “PRESENTATION”) HAVE BEEN PREPARED BY CXENSE ASA (THE”COMPANY”) EXCLUSIVELY FOR INFORMATION PURPOSES. THIS PRESENTATION HAS NOT BEEN REVIEWED OR REGISTERED WITH ANY PUBLIC AUTHORITY OR STOCK EXCHANGE. RECIPIENTS OF THIS PRESENTATION MAY NOT REPRODUCE, REDISTRIBUTE OR PASS ON, IN WHOLE OR IN PART, THE PRESENTATION TO ANY OTHER PERSON. THE CONTENTS OF THIS PRESENTATION ARE NOT TO BE CONSTRUED AS LEGAL, BUSINESS, INVESTMENT OR TAX ADVICE. EACH RECIPIENT SHOULD CONSULT WITH ITS OWN LEGAL, BUSINESS, INVESTMENT AND TAX ADVISER AS TO LEGAL, BUSINESS, INVESTMENT AND TAX ADVICE. THERE MAY HAVE BEEN CHANGES IN MATTERS, WHICH AFFECT THE COMPANY SUBSEQUENT TO THE DATE OF THIS PRESENTATION. NEITHER THE ISSUE NOR DELIVERY OF THIS PRESENTATION SHALL UNDER ANY CIRCUMSTANCE CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THAT THE AFFAIRS OF THE COMPANY HAVE NOT SINCE CHANGED, AND THE COMPANY DOES NOT INTEND, AND DOES NOT ASSUME ANY OBLIGATION, TO UPDATE OR CORRECT ANY INFORMATION INCLUDED IN THIS PRESENTATION. THIS PRESENTATION INCLUDES AND IS BASED ON, AMONG OTHER THINGS, FORWARD-LOOKING INFORMATION AND STATEMENTS. SUCH FORWARD-LOOKING INFORMATION AND STATEMENTS ARE BASED ON THE CURRENT EXPECTATIONS, ESTIMATES AND PROJECTIONS OF THE COMPANY OR ASSUMPTIONS BASED ON INFORMATION AVAILABLE TO THE COMPANY. SUCH FORWARD-LOOKING INFORMATION AND STATEMENTS REFLECT CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND ARE SUBJECT TO RISKS, UNCERTAINTIES AND ASSUMPTIONS. THE COMPANY CANNOT GIVE ANY ASSURANCE AS TO THE CORRECTNESS OF SUCH INFORMATION AND STATEMENTS. AN INVESTMENT IN THE COMPANY INVOLVES RISK, AND SEVERAL FACTORS COULD CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE COMPANY TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS THAT MAY BE EXPRESSED OR IMPLIED BY STATEMENTS AND INFORMATION IN THIS PRESENTATION, INCLUDING, AMONG OTHERS, RISKS OR UNCERTAINTIES ASSOCIATED WITH THE COMPANY’S BUSINESS, SEGMENTS, DEVELOPMENT, GROWTH MANAGEMENT, FINANCING, MARKET ACCEPTANCE AND RELATIONS WITH CUSTOMERS, AND, MORE GENERALLY, GENERAL ECONOMIC AND BUSINESS CONDITIONS, CHANGES IN DOMESTIC AND FOREIGN LAWS AND REGULATIONS, TAXES, CHANGES IN COMPETITION AND PRICING ENVIRONMENTS, FLUCTUATIONS IN CURRENCY EXCHANGE RATES AND INTEREST RATES AND OTHER FACTORS. SHOULD ONE OR MORE OF THESE RISKS OR UNCERTAINTIES MATERIALISE, OR SHOULD UNDERLYING ASSUMPTIONS PROVE INCORRECT, ACTUAL RESULTS MAY VARY MATERIALLY FROM THOSE DESCRIBED IN THIS DOCUMENT. THE COMPANY DOES NOT INTEND, AND DOES NOT ASSUME ANY OBLIGATION, TO UPDATE OR CORRECT THE INFORMATION INCLUDED IN THIS PRESENTATION. THIS PRESENTATION IS SUBJECT TO NORWEGIAN LAW, AND ANY DISPUTE ARISING IN RESPECT OF THIS PRESENTATION IS SUBJECT TO THE EXCLUSIVE JURISDICTION OF NORWEGIAN COURTS

Important notice

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