investor presentation€¦ · the statements contained in this presentation that are not historical...
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© 2015 Actua Corporation / All Rights Reserved / 1
Investor Presentation
May 2015
© 2015 Actua Corporation / All Rights Reserved / 2
Forward-Looking Statements
The statements contained in this presentation that are not historical facts are forward-looking statements that
involve certain risks and uncertainties, including, but not limited to, risks associated with the effect of economic
conditions generally, capital spending by our customers, our ability to retain existing customer relationships and
secure new ones, our ability to compete successfully against alternative solutions, our ability to timely and
effectively respond to technological developments, our ability to retain key personnel, our ability to have continued
access to capital and to deploy capital effectively and on acceptable terms, our ability to maximize value in
connection with divestitures, and other risks and uncertainties detailed in Actua’s filings with the Securities and
Exchange Commission. Those and other factors may cause actual results to differ materially from those projected.
© 2015 Actua Corporation / All Rights Reserved / 3
Non-GAAP Financial Measures
Non-GAAP net income (loss) and non-GAAP net income (loss) per diluted share are non-GAAP financial measures and have no
standardized measurement prescribed by GAAP. When referring to non-GAAP financial measures, the term “adjusted” is used
interchangeably with the term “non-GAAP” by Actua’s management and the two have identical definitions. Non-GAAP net income (loss) is
GAAP net income (loss) attributable to Actua, including acquired businesses’ deferred revenue and excluding share-based compensation,
amortization of intangibles, impairment-related and other costs, transaction expenses, other (income) loss, net, equity loss current non-
cash income tax benefit on discrete item and loss (income) from discontinued operations. Non-GAAP net income (loss) per diluted share is
non-GAAP net income (loss) divided by (1) GAAP shares, including the any impact of incremental dilutive securities (in the case of income)
or (2) GAAP shares, excluding any impact of incremental dilutive securities (in the case of loss). Actua's consolidated businesses are
BOLT, FolioDynamix, GovDelivery and MSDSonline as of March 31, 2015. Please note the following:
• FolioDynamix became a consolidated business on November 3, 2014 and, therefore, will be included in Actua’s consolidated results
beginning on November 1, 2014. The results of FolioDynamix for the first two days of November 2014 were insignificant for
consolidation purposes.
• Channel Intelligence, Investor Force and Procurian were sold in Q1, Q1 and Q4 2013, respectively, and are presented as
discontinued operations under GAAP. Receipt of respective escrow releases occurred throughout 2014 and is presented within our
non-GAAP measures as “Loss (income) from discontinued operations.”
Actua's management believes these non-GAAP financial measures provide useful information to investors and potential investors that
enables them to view Actua’s business in a similar manner as Actua's management and provide meaningful supplemental information
regarding Actua’s operating results as they exclude amounts that Actua excludes as part of its monitoring of operating results and
assessment of the performance of its business.
© 2015 Actua Corporation / All Rights Reserved / 4
Overview
BRINGING THE POWER OF THE CLOUD TO INDUSTRY-SPECIFIC VERTICAL MARKETS
© 2015 Actua Corporation / All Rights Reserved / 5
Overview
• Multi-vertical cloud software company
• Reported $30.6 million of revenue and $(0.10) of adjusted net income in Q1 2015
• 2015 guidance ranges:
– $133 million to $138 million of revenue (net of $2.5 million of deferred revenue)
– $(0.36) to $(0.40) of ANI
– Between $(5.0) million and $(9.0) million of annual operating cash flow
• 87% recurring revenue with 97+% retention rates
• Operating under 4 market leading brands
• Leader in each market at early stage of cloud adoption
• 3 of 4 brands are operating cash flow positive
• Investing for growth with emphasis on sales and marketing, product development
and tuck-in acquisitions
© 2015 Actua Corporation / All Rights Reserved / 6
Evolution of Cloud Computing Space
Emergence of SaaS
• Software is eating the world
• The cloud is eating software
• Dozens of examples of horizontal
cloud companies: Salesforce, Concur,
NetSuite, etc.
Vertical SaaS
• Deep industry solutions with
significant leverage
• More capital efficient
• Attractive competitive moats
• Few new market entrants
• Sticky customer relationships
• Automating areas outside the
enterprise
1ST WAVE 2ND WAVE
© 2015 Actua Corporation / All Rights Reserved / 7
Actua’s Vertical Strategy
Powering established, successful brands—with significant growth still ahead
© 2015 Actua Corporation / All Rights Reserved / 8
What it Means to be an Actua Company
Being an Actua Company makes it easier to:
• Sell to customers
• Accelerate market share and adoption
• Attract, grow and retain talent
• Deliver innovation faster
© 2015 Actua Corporation / All Rights Reserved / 9
Actua Market Characteristics
Attractive Market Size & Growth Opportunities> $ Billion + market, growing >20%
Pursuing markets we can transform
Highly fragmented, unautomated, slow to innovate
Early Cloud AdoptionProven customers, yet < 10% total market penetration
Attractive Competitive Dynamics
Clear competitive moat via big data and network effect
© 2015 Actua Corporation / All Rights Reserved / 10
Audience Building / Efficiency / Actionable Insight
Safety / Compliance / Regulatory Reporting
Insurance Market
Public SectorCommunications Market
EH&S ComplianceMarket
MULTI-BILLIONDOLLAR
Total Addressable
Market
Actua’s Platforms
Investment / Wealth Management
Wealth Management
Market
Distribution / Access /
Retention
© 2015 Actua Corporation / All Rights Reserved / 11
2013
Financial Profile
Gross Margins %
Sales and Marketing %
General and Administrative %
%s determined excluding stock-based compensation and deferred revenue adjustments from purchase accounting
Q1 2015
72%
Research and Development %
45%
32%
17%
2014
69%
37%
27%
23%
Retention Rates %
Recurring Revenue %
97%
87% 87%
97%
71%
46%
41%
15%
87%
95%
© 2015 Actua Corporation / All Rights Reserved / 12
The Power of the Bolt Platform to Transform Insurance
Customer RelationshipsAlways say ‘yes’ to customers and meet all
their needs with the Bolt Platform
DistributionLeverage new distribution channels with the
Bolt Platform to reach more customers.
• Broader Distribution brings Insurers new customers they otherwise wouldn’t see.
• Broader Customer Relationships drive up customer/agent satisfaction, retention
and customer lifetime value.
Broaden Broaden
Increase Customer Retention
Maximize Revenue and
CLV
Products represented
as share of wallet
Homeowners
AutoMissed Rev.
360 Degree View of
customer
Flood
Renters
Homeowners
AutoPet
Back-end Front-end
© 2015 Actua Corporation / All Rights Reserved / 13
Provides a multi-channel, multi-carrier software
platform that enables insurance distributors to retain
and grow revenue through a comprehensive insurance
solution
Important metrics:*
• Annual Revenue Growth: Flat growth in Q1 2015 compared to Q1
2014
• New Signings: Expanded relationships with three biggest customers
and launched a partnership with Google Compare
• Total Customers: Insurance carriers (63, of which 5 are carrier
distribution partners), independent agents (2,100), alternative
distribution partners (4), and state exchange (1)
• Pipeline: Opportunities grew from six to nine large, mid-to-late stage
deals, while all prior opportunities remain in pipeline
• TAM: Multi-billion $$
• More than $1 billion of premium running through the platform, up from
$850 million at the end of 2014
• Competitive Moat: Platform is integrated into 63 of the largest
insurance carriers and has over 3,000 carrier connections which creates
the largest source of insurance flow for direct carriers, agents, agencies
and alternative insurance distributors
• Operating cash flow negative for the year
• Multi-year/multi-million dollar contracts
* As of 3/31/15 unless otherwise noted
Actua’s Platforms
© 2015 Actua Corporation / All Rights Reserved / 14
FolioDynamix: Maximizing revenue for wealth managers
Advisors are wasting 60% of their time
on non-revenue generating tasks.
The FolioDynamix
Platform enables:
FOCUS ON
REVENUE
GENERATING
ACTIVITIES
• Prospecting
• Client Relationship
Building
• Driving Referrals
• Cross Selling
• Investment research
• Proposal generation
• Trade execution
• Tax Optimization
• Portfolio Rebalancing
• Professional sales
materials
• Performance reporting
• Client Reporting
Source: http://www.fundspeople.com/system/media/5047/original/Encuesta.pdf?1382692734
Advisors using the FolioDynamix
platform can maximize revenue,
efficiencies, productivity, and agility
OUTSOURCE
NON-REVENUE
GENERATING
ACTIVITIES
© 2015 Actua Corporation / All Rights Reserved / 15
Actua’s Platforms
Enables the delivery of client-centric, innovative, scalable,
wealth management solutions through secure, cloud-based,
fully integrated, advisory products and solutions
Important Metrics:*
• Annual Revenue Growth: 27% in Q1 2015 compared to Q1 2014
• New Signings: Signed eight new multi-year deals since the beginning
of 2015, five of which are large banks; seven are medium-sized (six-
figure deals); and one is a large deal (seven-figure)
• Total Customers: More than 200 banks, brokerage firms and large
RIAs
• Pipeline: 25% pipeline growth since the beginning of 2015
• TAM: Multi-billion $$
• Competitive Moat: Comprehensive, client-centric technology platform
with integrated proprietary advisory products
• Operating cash flow positive for the year
• Multi-year/multi-million dollar contracts
• $688 billion in assets under administration as of 12/31/2014
• More than 97,000 advisors and users
• $4.1 billion in regulatory assets under management
*As of 3/31/15 unless otherwise noted
© 2015 Actua Corporation / All Rights Reserved / 16
GovDelivery: Reach, Engage and Convert
• Insight
• Automation
• Segmentation
Creating safer communities,
happier commuters, healthier
families and better government.
The Old Way The New Way
TV Commercials
Print Ads
Radio
Commercials
Word-of-Mouth
Email / List Serves
• Networks
• Overlays
• Sign Ups
• Messaging
• Mobile
• Social
• Targeted Messages
• Drive Action
75 Million Citizen Network
REACH
ENGAGE
CONVERT
© 2015 Actua Corporation / All Rights Reserved / 17
**
Digital communications and marketing platform that enables
public sector organizations to effectively reach citizens and
drive action
Important metrics:*
• Annual Revenue Growth: 25% in Q1 2015 compared to Q1 2014
• New Signings: Closed 29 deals in Q1 2015, reporting strongest
Q1 ever in the state and local markets and closed several deals
with federal agencies subsequent to quarter end
• Total Customers: Serving 1,000+ federal, state, local and UK
government agencies reaching 80 million citizen subscribers
• Pipeline: 20% pipeline growth since the beginning of 2015,
including 16 federal program opportunities
• TAM: > $1 billion
• Competitive Moat: Subscriber base creates network effect,
significantly expanding reach and audience for each customer
• Operating cash flow positive for the year
• Annual subscription revenue model
* As of 3/31/15 unless otherwise noted
Actua’s Platforms
© 2015 Actua Corporation / All Rights Reserved / 18
MSDSonline: Automating the desktop of the Safety Manager
SDS/Chemical Mgmt.
Incident Mgmt. & Reporting
Audit & Inspections
Training
Compliance Mgmt. & Education
Mgmt. of Change
Risk Analysis
Green House Gas
Sustainability Metrics & Reporting
Complexity &
Reporting
Significant Consequences:
Corporate Responsibility
Corporate Reputation
Law Suits and Litigation
Costly Fines(5-figure/day)
External Pressures:
Regulatory Pressure
© 2015 Actua Corporation / All Rights Reserved / 19
Environmental, Health and Safety compliance platform
that enables organizations to meet stringent and costly
OSHA requirements
Important Metrics:*
• Annual Revenue Growth: 41% in Q1 2015 compared to Q1 2014
• New Signings: Added 562 new customers in Q1 2015, including two
cross-sell wins with two large manufacturers made possible by the
combined MSDSonline/KMI platforms. These new signings primarily
consisted of new platform customers (those that have access to the
full platform of products) with higher ASPs.
• Total Customers: Over 10,000 companies; protecting more than 8
million employees in U.S. and Canada
• Pipeline: Growth is slightly ahead of revenue growth and is skewed
towards large platform customers (customers with access to the full
platform of products)
• TAM: > $3 billion
• Competitive Moat: Database of over 8 million material safety data
sheets is the only comprehensive web-based library that ensures
100% compliance for companies and continues to expand as new
customers come onto the platform
• Operating cash flow positive for the year
• 3-year subscription revenue model
* As of 3/31/15 unless otherwise noted
Actua’s Platforms
© 2015 Actua Corporation / All Rights Reserved / 20
Investment Highlights
• Large market opportunity
• Clear market leader in each vertical market
• Strong recurring revenue base
• Demonstrated record of outstanding revenue growth
• Proven track record of successfully entering and scaling cloud-ready
markets
© 2015 Actua Corporation / All Rights Reserved / 21
Financials
© 2015 Actua Corporation / All Rights Reserved / 22
Consolidated Income Statements
(In thousands, except per share data)
2015 2014
Revenue 30,592$ 18,422$
Operating Expenses
Cost of revenue (a) 9,732 4,899
Sales and marketing (a) 11,236 8,531
General and administrative (a) 15,436 10,009
Research and development (a) 7,093 3,253
Amortization of intangibles 4,016 2,301
Impairment related and other 174 -
Total operating expenses 47,687 28,993
Operating income (loss) (17,095) (10,571)
Other income (expense):
Other income (loss), net 1,365 300
Interest income 19 86
Interest expense (37) (511)
Income (loss) before income taxes, equity loss and discontinued operations (15,748) (10,696)
Income tax benefit (expense) (177) (94)
Equity loss - (312)
Income (loss) from continuing operations (15,925) (11,102)
Income (loss) from discontinued operations - 48
Net income (loss) (15,925) (11,054)
Less: Net income (loss) attributable to the noncontrolling interest (1,160) (904)
Net income (loss) attributable to Actua (14,765)$ (10,150)$
Amounts attributable to Actua common shareholders:
Net income (loss) from continuing operations (14,765)$ (10,198)$
Net income (loss) from discontinued operations - 48
Net income (loss) attributable to Actua common shareholders (14,765)$ (10,150)$
Basic and diluted net income (loss) per share:
Income (loss) from continuing operations attributable to Actua common shareholders (0.40)$ (0.27)$
Income (loss) from discontinued operations attributable to Actua common shareholders - 0.00
Income (loss) attributable to Actua common shareholders (0.40)$ (0.27)$
36,842 37,096
(a) Includes equity-based compensation of:
Cost of revenue 26$ 19$
Sales and marketing 58 41
General and administrative 7,093 3,760
Research and development 45 28
7,222$ 3,848$
Shares used in computation of basic and diluted net income (loss) per common
share attributable to Actua common shareholders
Three Months Ended March 31,
© 2015 Actua Corporation / All Rights Reserved / 23
Consolidated Balance Sheets
(In thousands)
March 31, December 31,
2015 2014
ASSETS
Cash and cash equivalents 88,280$ 103,134$
Restricted cash 992 1,132
Accounts receivable, net 23,796 23,134
Deferred tax asset 182 182
Prepaid expenses and other current assets 4,314 3,979
Total current assets 117,564 131,561
Fixed assets, net 9,121 7,947
Goodwill and Intangibles, net 362,495 366,511
Cost and equity method investments 18,146 17,672
Deferred tax asset 2,989 2,998
Other assets, net 1,952 1,652
Total Assets 512,267$ 528,341$
LIABILITIES AND EQUITY
Current maturities of other long-term debt 500$ 500$
Accounts payable 12,044 12,595
Accrued expenses 8,488 7,735
Accrued compensation and benefits 7,211 9,241
Deferred revenue 37,322 33,238
Total current liabilities 65,565 63,309
Long-term debt 820 -
Deferred revenue 1,240 1,256
Deferred tax liability 266 266
Other liabilities 4,904 4,408
Total Liabilities 72,795 69,239
Redeemable noncontrolling interest 3,486 6,221
Total Equity 435,986 452,881
Total Liabilities, Redeemable noncontrolling interest and Equity 512,267$ 528,341$
© 2015 Actua Corporation / All Rights Reserved / 24
Demonstrated Quarterly Growth
$12.0
$13.5
$16.1
$17.7$18.4
$19.0
$20.8
$26.6
$30.6
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
$35.0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2013 2014
Reven
ue (
Mil
lio
ns
)
2015
© 2015 Actua Corporation / All Rights Reserved / 25
Quarterly Non-GAAP Net Income/Share
-$0.14
-$0.10
-$0.08-$0.09
-$0.10
-$0.12 -$0.12
-$0.03
-$0.10
-$15.00
-$10.00
-$5.00
$0.00
$5.00
$10.00
$15.00
-$0.20
-$0.15
-$0.10
-$0.05
$0.00
$0.05
$0.10
$0.15
$0.20
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Non-GAAP Net Income/Share Operating Cash Flow
2013 2014
No
n-G
AA
P N
et
Inc
om
e/S
ha
re
Op
era
tin
g C
as
h F
low
2015
© 2015 Actua Corporation / All Rights Reserved / 26
Actua Stock Repurchases by Year
$9.3
$2.7
$8.6 $8.3
$12.0
$10.0
$1.7
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
2008 2009 2010 2011 2012 2013 2014 2015
Co
st
of
Rep
urc
ha
se
(in
mil
lio
ns
)
Repurchased
1.9 million
shares
Per share
cost
$4.75
Repurchased
0.5 million
shares
Per share cost
$5.45
Repurchased
0.8 million
shares
Per share cost
$10.17
Repurchased
0.9 million
shares
Per share
cost
$8.94
Repurchased
0.9 million
shares
Per share
cost
$13.23
None
Repurchased
Total amount deployed from inception of buyback program through current = $55.3 million to repurchase 6.0
million shares at an average price of $9.23, with $94.7 million remaining under plan
Repurchased
0.8 million
shares
Per share
cost
$16.52
Repurchased
0.1 million
shares
Per share
cost
$17.66
© 2015 Actua Corporation / All Rights Reserved / 27
Appendix
© 2015 Actua Corporation / All Rights Reserved / 28
$20.0
$50.0
$80.0
$110.0
$140.0
2013 Actual 2014 Actual 2015 Guidance
Revenue Growth
2015 Guidance
Range:
$133.0M - $138.0M
Fig
ure
s s
how
n in
mill
ions
© 2015 Actua Corporation / All Rights Reserved / 29
Non-GAAP Net Income (Loss)/Share
($0.50)
($0.40)
($0.30)
($0.20)
2013 Actual 2014 Actual
2015 Guidance Range:
Revised:$(0.36) - $(0.40)
Original: $(0.37) - $(0.41)
2015 Guidance
© 2015 Actua Corporation / All Rights Reserved / 30
Consolidated Statements of Cash Flows
(In thousands)
2015 2014
Operating Activities - continuing operations
Net income (loss) (15,925)$ (11,054)$
(Income) loss from discontinued operations, including gain on sale, net of tax - (48)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization 5,240 3,123
Equity-based compensation 7,222 3,848
Other (income) loss (1,365) (300)
Equity loss - 312
Deferred tax asset (13) -
Changes in assets and liabilities, net of effect of acquisitions:
Accounts receivable, net (662) (3,802)
Prepaid expenses and other assets (635) 22
Accounts payable (551) 42
Accrued expenses (251) (1,193)
Accrued compensation and benefits (2,030) (3,567)
Deferred revenue 4,068 3,030
Other liabilities 496 (64)
Cash flows provided by (used in) operating activities (4,406) (9,651)
Investing Activities - continuing operations
Capital expenditures, net (2,340) (608)
Change in restricted cash 140 (164)
Proceeds from sales/distributions of ownership interests 1,415 293
Ownership acquisitions, net of cash acquired (1,257) -
Cash flows provided by (used in) investing activities (2,042) (479)
Financing Activities - continuing operations
Acquisition of noncontrolling interest in subsidiary equity (3,952) -
Borrowings of long-term debt 820 -
Repayments of long-term debt and capital lease obligations (24) (3,488)
Purchase of treasury stock (1,704) -
Tax withholdings related to equity-based awards (3,494) (1,271)
Cash received for stock options exercised 65 -
Cash flows provided by (used in) financing activities (8,289) (4,759)
Effect of exchange rate on cash (117) -
Discontinued Operations:
Cash flows provided by (used in) operating activities - 48
Cash flows provided by (used in) investing activities - -
Cash flows provided by (used in) financing activities - -
Net increase(decrease) in cash and cash equivalents from discontinued operations - 48
Net increase (decrease) in cash and cash equivalents (14,854) (14,841)
Cash and cash equivalents at beginning of period 103,134 334,656
Cash and cash equivalents at end of period 88,280$ 319,815$
Three Months Ended March 31,
© 2015 Actua Corporation / All Rights Reserved / 31
Cash Flow From Operations
($20.0)
($15.0)
($10.0)
($5.0)
$0.0
2013 Actual 2014 Actual
2015 Guidance Range:
Revised:$(5.0)M - $(9.0)M
Original:$(6.0)M - $(10.0)M
2015 Guidance
Fig
ure
s s
how
n in
mill
ions
© 2015 Actua Corporation / All Rights Reserved / 32
Investor Presentation
May 2015