Q1 2016 results 12 May 2016
CXENSE:OSE today Sector Software-as-a-Service Value prop. Personalization of internet sites and apps Customers All companies with online sites and apps NOK 200 million annualized – and growing Revenues Recurring software license fees Gross margin ~83% Organization 160 employees in Europe, Americas and Asia 2
People want relevant and engaging online experiences Personalization needed 3
Why personalization? Improved user experience More engagement Higher conversion Reduced churn Increased revenue 4
1.5bn devices interacted with Cxense technology in Q1 # Events interacting with Cxense # Devices interacting with Cxense Billion Million 50 1600 45 1400 40 1200 35 1000 30 25 800 20 600 15 400 10 200 5 0 0 Events = page-views 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 5
Growing customer base and adoption Cxense customers Q1’16 Consumer brands Financial services Sports e-commerce and classifieds Media Publishers and Broadcasters Verticals Time 6
Revenue development Group revenue* 6 263 USD 1 000 6 056 4 818 4 174 4 152 4 140 4 115 3 881 3 540 3 212 1 708 1 500 1 110 1 065 887 619 389 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 *Figures for period Q2’12 to Q1’13 are restated to exclude the discontinued operations of PPN AG 7
Growth strategy: Pursuing value within three areas • Continue to commercialize the world’s leading personalization offering • Customer up-lift and add new customers to recurring revenue base Revenue growth • Minimize churn • Sharp focus on core, most value-enhancing products for customers Profitability • Cost effectiveness • Focused R&D investments to maintain and develop uniqueness • Streamlining a market-oriented organization to enhance sales efficiency Scalability • Financial flexibility 8
Streamlining a market-oriented technology company OSLO LONDON BOSTON SAMARA MADRID NEW YORK TOKYO Focused sales and Strengthened R&D: Focused offering: marketing: SINGAPORE Doubled Leading Americas, organization at personalization Europe and stable cost base suite Japan BUENOS AIRES 9
Financials 10
61% YoY revenue growth Revenue USD million per quarter +61% 7.0 6.3 6.0 0.8 Ad Network • Strong personalization trend drives Cxense’s PCAN Business Segment growth 5.0 3.9 • Personalization Suite growth of 111% 4.0 Personalization Suite 3.7 0.6 SaaS Business Segment 3.0 1.7 2.0 1.0 1.8 Advertising Solutions 1.6 SaaS Business Segment 0.0 Q1'15 Q1'16 11 Personalization Suite: DMP, analytics, content, video and search products Advertising Solutions: Display, CXAD and Maxifier products
Continued high contracting activity in Q1 2016 New contracts per quarter 41 37 37 34 • 37 new contracts 31 31 • 22 on new customers • 15 up-sell on existing customers 22 21 14 • Annualized Recurring Revenue (ARR) 11 11 11 of new contracts closed in the quarter 7 of USD 1.6 million 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 12
Recurring revenue model: Solid foundation for organic growth Annualized Recurring Revenue (ARR) on contracts closed in the quarter 3 000 2 652 New ARR effect in reported figures 2 441 2 500 Lost ARR (churn) Statistics last four quarters: 2 000 1 784 1 716 1672 1 650 1 536 1580 1 476 1 404 • 1 500 Closed New Annualized Recurring (ARR)Revenue 1 320 of USD 7.5 million 1 084 1 100 964 1 000 500 • Lost ARR of USD -2.6 million - (212) • (308) Net New ARR of USD 4.9 million (27% organic (500) (489) (520) growth over total revenue in the period) (648) (1 000) (892) (1 500) (1 668) (2 000) Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 1 Annualized recurring revenue effect of quarterly performance 13 * H1 2015 Churn was higher than normal due to losses on advertising portfolio
Underlying EBITDA improvement continues USD million 6.26 6.06 Revenues 4.82 EBITDA adjusted • In Q1 2016 Cxense completed the planned post-acquisition restructuring 3.54 • Thus reported OPEX was high and impacted reported EBITDA negatively • EBITDA adjusted for one-off restructuring costs and full effect of the completed cost reductions is USD -0.8 million (0.79) (1.50) (1.61) (2.19) Q2'15 Q3'15 Q4'15 Q1'16 14
Q1 2016 opex run-rate level below reported opex as a result of completed cost reductions Quarterly group OPEX – reported vs “run - rate” USD 1 000 6 689 -208 -451 6 188 -525 Effects of the Q1 2016 restructuring: 5 505 • R&D development from two main offices – Oslo and Samara. Close down of Melbourne and Stockholm offices • More R&D resources focused on Personalization suite development • Output increase: 75 R&D FTEs in Q2 2016 vs 39 in Q1 2015 • Cost effectiveness Q4 2015 Q1 2016 Share based Restructuring Full effect of Q1 2016 adjusted reported payments costs completed adjusted run-rate cost run-rate reductions 15
Cash flow and cash position Q1 2016 cash flow development USD 1,000 • Q1 2016 cash flow from operations of USD -2.2 million, impacted by; • Year end bonuses paid accrued for in 2015 but 5 829 paid in Q1 2016 (2 241) • Restructuring cost • Through a year the EBITDA adjusted for share ( 516 ) 0 based payments and cash flow from operations 3 072 will equal • Q1 2016 adjusted EBITDA run rate was -0.8 million and USD -1.3 million per quarter with R&D capitalization add back • Outgoing cash position of USD 3.1 million Cash at period Net cash from Net cash used Net cash from Cash at period start operations in investing financing end activities activities 16
Operations 17
Why personalization? Improved user experience More engagement Higher conversion Reduced churn Increased revenue 18
One size fits all? CX NEWS 19
One size fits all? CX NEWS 8.23 pm London Desktop Logged in Subscribes to CX Magazine Not interested in Entertainment Not interested US domestic news Recently viewed Mercury Crossing CX MAG Recently Read El Chapo’s Extradition No plans of travelling to Egypt 20
One size fits all? CX NEWS Enjoy your subscription? Update your CC details today 8.23 pm London Desktop Logged in Subscribes to CX Magazine Not interested in Entertainment Not interested US domestic news Recently viewed Mercury Crossing Recently Read El Chapo’s Extradition No plans of travelling to Egypt Interested in Politics Regularly scans Tech news Keeps updated on the latest science news Likes Horse racing Long term interest for Parenting In the market for a new car Credit card expires in 1 month 21
Strong need for personalization across multiple verticals CX TRAVEL Young professional? We give you the best mortgage rates Read more and many more … 22
Real-time, actionable Data is the foundation enabling you to Users expect a personalized experience Convert Understand Engage 23
Cxense offers the world’s leading personalization software Unique real-time data capture The richest user profiles in Real-time personalized 1.5 billion devices the market site&apps Multiple data sources A personal and engaging experience More digital revenue 24
Summary and outlook
Summary and Outlook • All-time-high revenues in Q1 2016 • High activity on new customers and upsell to existing client base • Refocusing executed in Q1 2016; strengthening service offerings at a lower cost • Continued cost synergies expected in Q2 2016; on target for 2016 EBITDA profitability • Well-positioned in a growing digital economy with real-time data management and personalization offerings 26
Appendix 27
Key figures Change USD 1,000 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 q/q Revenues 3 881 3 540 4 818 6 056 6 263 3 % SaaS segment 3 301 2 954 4 183 5 291 5 467 3 % PCAN segment 619 620 675 805 837 4 % Inter-segment elimination (39) (34) (39) (39) (41) Gross profit 2 916 2 426 3 646 4 686 4 717 1 % Gross margin SaaS segment 84 % 78 % 83 % 85 % 83 % Gross margin PCAN segment 24 % 22 % 24 % 22 % 19 % OPEX 4 466 5 518 5 779 6 093 6 689 Non-IFRS OPEX adjustments (121) (901) (523) 95 (659) Estimated full effect of cost-reduction program (176) (525) OPEX adjusted 4 170 4 617 5 256 6 188 5 505 -11 % EBITDA (1 550) (3 092) (2 134) (1 407) (1 972) -40 % EBITDA adjusted (1 253) (2 191) (1 611) (1 502) (789) 47 % 28
Income Statement USD 1,000 Q1 2016 Q1 2015 Revenues consolidated 6 263 3 881 Cost of goods sold 1 546 965 Employee benefit expense 4 857 2 918 Depreciation & Amortisation expense 865 358 Other operating expense 1 832 1 548 Total operating expense 1 546 965 Net operating income/(loss) (2 838) (1 908) Net financial income/(expense) (171) 11 Share of profit from associated companies - (149) Net income/(loss) before taxes (3 158) (1 896) Income tax expense 27 (7) Net income/(loss) for the period (3 185) (1 890) 29
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