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Corporate Presentation
Q2 2011
Safe Harbor Statement“Safe harbor” statement under the Private Securities Litigation Reform Act of 1995:
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are SuccessFactors’ current expectations
and beliefs.
These forward-looking statements include statements about anticipated revenue and deferred revenue and expected revenue for
the fourth fiscal quarter of 2010 and the full fiscal year 2010. Factors that could cause actual results to differ materially with
respect to our anticipated results for the fourth quarter include the fact that our fourth quarter financial statement review process is
ongoing, and accordingly, actual results are preliminary and are subject to further review as part of our quarterly financial
statement review process, and accordingly, we cannot assure you that the final amounts will not change materially as a result of
our quarterly review process. Factors that could cause actual results to differ materially from those contemplated by the other
forward-looking statements include: our ability to continue to experience high customer renewal rates; whether customers renew
their agreements for additional modules or users; levels of new customers; pricing pressures; the uncertain impact of the overall
global economic slowdown, including on our customers, prospective customers and partners, renewal rates and length of sales
cycles; the fact that our market is at an early stage of development, and it may not develop as rapidly as we anticipate; competitive
factors; outages or security breaches; our ability to develop, and market acceptance of, new services; our ability to continue to sell
our services outside the HR area; our ability to manage our growth; our ability to successfully expand our sales force and its
effectiveness; whether our resellers and other partners will be successful in marketing our products; our ability to continue to
manage expenses; the impact of unforeseen expenses; and general economic conditions worldwide. If any such risks or
uncertainties materialize or if any of the assumptions proves incorrect, our results could differ materially from the results expressed
or implied by the forward-looking statements we make.
Further information on these and other factors that could affect our financial results is included in the section entitled “Risk
Factors” in our Annual Report on Form 10-K for 2010 and in our recent reports on Form 10-Qs and in other filings we make with
the Securities and Exchange Commission from time to time.
These documents are or will be available in the SEC Filings section of the Investor Relations section of our website at
www.successfactors.com/investor. SuccessFactors, Inc. assumes no obligation and does not intend to update these forward-
looking statements, except as required by law.
Investment Highlights
Leader in large ($36 billion), fragmented, under-penetrated, fast growing market
BizX suite gives us unique competitive advantage
We have a product that has the capability to touch every employee in a STRATEGIC way
Strong execution and action oriented culture, posting market leading growth rates and hitting key metrics
Highly profitable, sticky recurring revenue model
Large underpenetrated user base (Over 15 million users and growing)
Platform provider to world’s largest enterprises (more than a suite)
3
Users
Customers
Countries
Industries
Languages
Largest Deployment
At IPO
2.0M+
1,400+
156+
60+
18
85K
Today
15M+
3,500+
185+
60+
34+
2M+
June 2008
3.7M+
1,950+
180+
60+
22
300K
Accelerating Leadership
4
BusinessExecution
95% of employees don’t
understand their company’s strategy
What Are We Solving?
6
50% of the average employee’s time is
spent on non-productive work
84% of large
companies say they are not using their workforce to its full potential
Source – Norton/Kaplan, Bersin & Associates, 2008
BizX Impact Across the Board
2.8%
Performance
Change
AVG
HIGH
5.4%
13.8%
Increased
Project
Completion
AVG
HIGH
67%
5.5%
Increased Time
Spent on Strategic
Priorities
AVG
HIGH
40%
Faster
Communication of
Strategy Change
1wkAVG
HIGH
8wk
Bridge the gap between Strategy and Execution
Execute top and bottom line
Source: Independent consultant research findings, June 2009. Study sampled 527 customers . 7
SF ROX – Building Decisive,
Lasting Business Outperformance
SF ROX Comprises the North American Publically listed companies who when the investment was made had been using
more then three modules for more than three quarters, with more than 50% of employees using the solution. N = 37.
20%-point gap to NASDAQ, 40%-point gap to S&P500
StrategyBusiness
Results
Social Sourcing
Succession
Recruiting
Attract
and Retain
Learn and
Develop
Formal learning
Social learning
Compliance
Career planning
Calibration
Performance
Goals
Business Alignment
and Performance
Social Collaboration
SuccessFactors Cloud Platform
Analytics and Workforce Planning
What we do:
Close the Execution Gap
Compensation
Employee Central 2.0 - Next Generation HRIS
Recognized Industry Leadership
10
3,500+ Blue-Chip Customers
Around the World
11
EMEA APAC
Top Retailer Top
Financial
Services
Company
Major US
Automak
er
Americas
Addressable Market
Business Impact
# of Users
EPM
Business Execution
Software
BusinessAnalytics
WorkforcePlanning
HR/Back-Office
Systems
Accelerating Adoption within $36B
Market
13
Social Learning
Business Alignment
$20.0Billion Market
People Performance
$15.9 Billion Market
Potential Market Opportunity
14
Source – Company estimates based on Dunn & Bradstreet, US
Census Bureau , Bersin & Associates , Forrester Research and
internal analysis, June 2009
Business Alignment
$20.0Billion Market
People Performance
$15.9 Billion Market
Web 2.0 Analytics
Projects Collaboration
Bigger Market, Bigger Impact
Business Execution
$35.9Billion Market
Potential Market Opportunity
15
Source – Company estimates based on Dunn & Bradstreet, US Census Bureau , Bersin & Associates , Forrester Research and internal analysis, June 2009
In our time, we’ve seen a lot of change
The workforce has changed
- US Census Bureau Data
By 2013, 47% of employees will be those born after 1977
Technology has changed
Sales of cloud-based
applications are growing
five times faster than those
of traditional applications
Have Workforce systems changed?
Core HR
Recruiting
Talent
Learning
Customers want an integrated platform that allows them to use the fewest
possible vendors
Talent Management Systems Customer Satisfaction 2011
Redefining Core HR and Learning
Employee Central 2.0 SuccessFactors Learning
Core HR systems not made for
today’s world
Siloed from talentPrimitive and difficult
analytics
File cabinets for
record-keeping
On-premise HRIS = stagnant,
costly, unusable2000
PeopleSoft 8.02010
PeopleSoft 9.0
HRMS Upgrades Slowing While Replacement Increasing
Employee Central 2.0 -Next Generation Core HR
The user interface is phenomenal ….thanks for making my job as a front line
manager much easier!
Radically different – Built for BizX
Talent integration
Actionable analytics
Collaboration
Built for all employees
Comprehensive Core HR
True Cloud
From forms to consumer apps
Designed for non-experts
Designed for our 8M+ users and today’s workforce... without training
Analytics that provides insights and
drives critical decisions
We can prioritize our activities, study specific workforce segments, conduct
root cause analyses, and identify high-priority issues.
- Peter Church, VP Human Resources
Correlate workforce and business data –
Support for financial data from external systems;
all data in one place
30 years of expertise, rich content,
designed for everyone
Reporting in a box: Know what to measure with
2000+ metrics; pre-configured custom reports
Identify problem areas – Compare with rich
benchmarks and uncover gaps
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But, only $1 billion is spend on traditional
learning management
systems
$125 billion is spent annually in the United
States on learning
$124 billion
Learning Market Dynamics
Social Learning On the Rise
• If you’re like most people, you learn:• 70% on the job
• 20% from bosses and mentors
• 10% through formaleducation and training
• But informal learning is rarely captured and shared beyond immediate associates
70% of learning is informalThe Teaching Firm: Where Productive Work and Learning Converge. 1998
Social Learning for the enterprise
This is the future of corporate learning and we're ahead of the curve with
SuccessFactors Social Learning
SuccessFactors Social Learning
Built For Business Execution
Community Learning
True Cloud
Joe Campbell, Director of talent development
Formal learning goes BizX
Customer
Federal Opportunity
Potential Spending on Cloud Computing by Agency
=
“This is a merger of true leaders.
SuccessFactors and Plateau are both
thought leaders, product leaders and
service leaders. A big part of
Plateau's ascension is the satisfaction
of the Plateau client base.
“SuccessFactors’ acquisition of
Plateau brings together the market
share leader in talent management
with one of the market leaders in
learning management to create a
global powerhouse in end-to-end
talent management software.”
“SuccessFactors just acquired another big
piece of the periodic table of elements. With
Plateau, they now have the opportunity to mix
things together that haven’t been mixed
together before. More companies than ever
desire a single, unified suite that they can tie to
their overall business strategy.”
Positive analyst feedback
Financial Review
All-Time High in Quarterly Non-
GAAP Revenue
35
48% y/y Revenue Growth ($MM)
$23.5$25.7
$29.7$33.0
$35.2$36.9 $38.7
$42.2 $44.7
$49.5$53.4
$61.7
$68.3$73.2
$0
$10
$20
$30
$40
$50
$60
$70
$80
Q1’08 Q2’08 Q3’08 Q4’08 Q1’09 Q2’09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11
72% Gross Margin
Delivered 42% Y/Y Billings Growth
$35 $37$42
$47
$33$39
$50
$63
$48$53
$66
$89
$63
$75
109%
68%
52%
2%-6%
7%
18%
34%
45%
35% 32%41%
31%
42%
1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11
Billings YoY Growth
36
In US$M
Continue to Accelerate Bookings
Outside of Core Performance and Goal
37
As a % of New/Upsell Billings2003 Q2 2011
North America
100%
North America
74%
International
26%
NA Enterprise
95%
Mid-Market
5%
NA Enterprise
40%
SMB, Channels,
Int’l
60%
Performance &
Goal Mgmt
20%Other Modules
80%
Other Modules
7%Performance &
Goal Mgmt
93%
New Customers
91%
Upsell
9%
New Customers
39%Upsell
61%
Geographies
Markets
Products
Upsell
Source: Internal SFSF data
Continued
Strong Operating Cash Flows
($25.0)
($12.0)
($5.3)
$2.0
$7.9
$15.4
$25.8
$31.7
$37.7
$43.4
$38.4 $42.0
3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11
Trailing 12-Month CFFO
38
In US$M
2011 Growth Drivers
New Customers• EMEA• North America• APAC
New Products • Learning• Employee Central• Social• Analytics• Recruiting• Calibration
Expand Distribution• Direct• Channels
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40
IPOQ4’07
Follow-OnQ2’08
Last reportedQ2’11
LT Target Model
Revenue 100% 100% 100% 100%
Gross Margin 53% 65% 72% 86%
R&D 27% 23% 18% 15%
S&M 108% 87% 43% 38%
G&A 29% 24% 12% 8%
Operating Margin (109)% (70)% 3% 25%
FCF % of Revenue (function of billing margin)
10% 35%
Operating Model Progress
The Future of Business Software
41
“SuccessFactors' annual revenue is only about 1/100th of
SAP's, it has only about 700 employees, and it has only one
CEO. But SuccessFactors should be SAP's worst
nightmare.”
SuccessFactors Is
The Future Of
Business SoftwareBob Evans
Global CIO: InformationWeek
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Corporate Presentation
Q2 2011