Cxense ASA Q4 2014 presentation 1 Important notice THIS - PowerPoint PPT Presentation

Cxense ASA Q4 2014 presentation 1

Important notice 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 2

Agenda Welcome and highlights Q4 2014 Financials Q4 2014 Tech update 3

Welcome and highlights Q4 2014 Financials Q4 2014 Tech update 4

Selected highlights Q4 2014  Annualized currency adjusted run rate of USD 18.3m in December 2014, as compared to a Q3 2014 run rate of USD 16.4m  Quarterly currency adjusted SaaS segment revenue of USD 3.8m, which represents a Y/Y growth of 43%  SaaS segment gross margin of 84% compared to 81% in the two previous quarters due to full effect from the change in hosting partners  The cost cutting plan is moving forward as planned, and the company is aiming for monthly operating expenses of of USD 1.5 million, a reduction of more than 20% compared to September 2014 opex level  North America is gaining traction, and was our strongest performing region in the quarter.  The Q4 2014 EBITDA for the SaaS segment was USD -3.3m. Adjusted for the expected full effect of the ongoing cost reductions as well as one-off items in the quarter, the loss would have been USD 1.5m 5

Selected contracts in Q4 2014 APAC Publisher based in Hong Kong Newspaper based in EMEA Copenhagen Largest retailer in Japan Japan North America Publisher based in Utah, USA Broadcaster based Latin America in Buenos Aires 6

Record number of contracts in Q4 2014  Strong momentum, and 34 new contracts signed in the quarter, a growth of 55% compared to Q3 2014  December contracts represent a monthly recurring revenue of USD 73k and a yearly revenue of USD 876k  The DMP (Data Management Platform) continues to gain traction  First Bank and Finance contract signed in February 2015  North American operation bounced back after the two previous modest quarters, and we see significant opportunities in the region in 2015  40 per cent of the contracts in the quarter were up-sell to existing clients 7

Uplift in sales efficiency New MRR (monthly recurring revenue) per year ▪ 2012: USD 137k ▪ 2013: USD 161k ▪ 2014: USD 301k New MRR per sales rep. per year (sales efficiency) ▪ 2012: USD 15k ▪ 2013: USD 16k ▪ 1H 2014 annualized: USD 17k ▪ 2H 2014 annualized: USD 25k ▪ Dec. 2014 closed annualized: USD 45k Churn ▪ 2012: USD 35k ▪ 2013: USD 39k ▪ 2014: USD145k (whereof USD 83k from our acquired portfolio) 8

Sales model with more people attacking the market High End sales Serving the largest clients world wide 5 ”The Elephant Hunters” within its sector Regional Sales Professionals with local knowledge 20 The five sales regions performing sales in a region New self service offering on 2 Online sales Cxense.com Cxense.com The number of sales people from 20 to 27; a growth of 35% 9

Welcome and highlights Q4 2014 Financials Q4 2014 Tech update 10

Strong sales growth from Q4 2013 to Q4 2014 Cxense SaaS segment* revenue growth Growth drivers • Growth in existing customer base USDm 4 • Capacity increase and upsell of new applications 0.94 3.59 +35% • Sale of recurring software licenses to 3 2.65 new customers • Gives accumulating revenue base 2 • Acquisition of existing customer bases • Upsell and value increase/leverage on acquired customer bases by connecting the 1 EIE platform Gross Margin 0 • Q4 2014 SaaS segment gross margin of 84%, compared to Q4 2013 gross Q4 2013 Growth Q4 2014 margin of 81% 11 *Q4 2014 (Q4 2013) Consolidated revenues (SaaS segment and PCAN segment) of USD 4.15million (USD 3.2 million)

KPIs for Q4 2014 SaaS segment • New committed Monthly Recurring Revenue (MRR) of USD 116,6 thousand in Q4 2014 New recurring • New committed MRR of USD 73 thousand in Dec 2014 – i.e. annualized run- revenue rate of USD 876 thousand • 34 new SaaS contracts in Q4 2014, compared to 22 last quarter New contracts / average deal size • Average deal size of new contracts is USD 3.4 thousand • New churn with full MRR effect of USD -33 thousand – annualized run-rate Churn effect of USD -132 thousand 12

Q4 USD appreciation with negative impact on revenue growth Cxense SaaS revenues – Q3 2014 to Q4 2014 development, USD thousand 70 -208 3 800 275 Currency adjusted quarterly growth: 3 591 Reported 7.6% quarterly 3 531 -77 growth: 1.7% ~85% of revenue is invoiced in other currencies than USD Q3 2014 Churn / New MRR Change in Currency Q4 2014 revenues Lost MRR services and effect revenues variable license revenues 13

Income statement – SaaS segment P&L SaaS (USD thousands) Q4 2014 Q4 2013 Q4 2014 comments  Revenues Revenue 3590 2649  Growth negatively affected by USD hike versus other currencies  85% of recurring revenue base is invoiced in other currencies COGS 565 501 than USD  Healthy currency adjusted growth Gross Profit 3 025 2 148 In % of revenue 84 % 81 %  Gross margin  Increase versus previous quarters due to full effect of hosting Employee benefits 4 487 2 935 cost improvements launched in Q3 2014 Wherof share based payements cost 136  Wherof share based social cost provisions and costs 76 Personnel costs Wherof salary and social restructuring prov. and costs 345  Number of FTEs reduced from 118 at the end of Q3 2014 to 95 after the reorganization  Re-organization executed during Q4 2014 – limited cost effect Other operating expenses 2 034 1 834 in the quarter 68 Wherof office moving costs and restructuring costs 0  Q4 2014 negatively affected by provisions for 2015 Wherof extraordinary/ special 496 0 restructuring costs  Full effect from cost reduction measures by June 2015, >80% Wherof direct transaction costs -419 0 by March 2015 Wherof one-off receivable provision 210 0 Wherof R&D refund -228 0  Other OPEX Total operating expenses 6 521 4 769  Significant one-off effects as a result of re-organization and Total operationg expenses adj. 5 837 0 other one-off items. EBITDA -3 496 -2 621  EBITDA EBITDA adj. -2 811 0  USD -1.5 million adjusted for one-off effects and expected full effect of re-organization and cost reduction measures, a Estimated full effect of cost reduction program 1299 significant reduction vs Q3 2014 adjusted EBITDA level of USD 3 million EBITDA adjusted for est. full effect of cost reduction -1512 14