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www.cxense.com Q1 2017 results 10 May 2017
www.cxense.com
Q1 2017 results10 May 2017
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
2
www.cxense.com
• Data management and personalization up 21% year-over-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
4,34,5
4,3
1,9
1,41,2 1,2
0,90,81,0
0,8 0,90,7
Q1'16 Q2'16 Q3'16 Q4'16 Q1'17
Data management & personalization softwareAdvertising softwarePCAN
Cxense revenue overview
USD million
3
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 revenueUSD million
4
www.cxense.com
Content Promotions Personalized
Product Offerings
Emails &
newsletters
Display Ads Push notifications
People expect relevant and engaging online experiences
Consumers want personalization
5
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
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
7
www.cxense.com
All new contracts in Q1 for data management and personalization software
11
14
11
7
11
2122
34
31
37
31
41
3735
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
8
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
VerticalsTime
9
www.cxense.com
Powering more than 7,000 sites
10
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
0
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
www.cxense.com
Financials
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 modelIllustrative
13
www.cxense.com
3,6
4,3
1,90,9
0,80,7
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%
RevenueUSD million
Ad Network / Programmatic = The PCAN segment
Advertising Software and Personalization and Data Management = The SaaS segment14
www.cxense.com
Strong demand for data management and personalization software
Reported
Revenues,
USD million
Churn effect,
USD million
4,304,50
4,303,90
3,60
Q1 ’16 Q2 ’16 Q3 ’16 Q4 ’16 Q1 ’17
-0,42
-0,07-0,06-0,09-0,07
0,901,201,20
1,40
1,90
Q1 ’17Q3 ’16 Q4 ’16Q2 ’16Q1 ’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
www.cxense.com
• 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
16
www.cxense.com
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 marginPercent
17
www.cxense.com
• 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)
18
www.cxense.com
10
35
-35
80
100
20
20
SaaS cost model scalability illustration
R&D EBITDAMarketingAccount
Mngmnt
& support
ARR* CoS (Hosting
cost)
Gross Profit Capitalized
R&D
1015
G&ASales & 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**
www.cxense.com
Q1 2017 cash flowUSD 1,000
21 960
12 805
(3 995)
(5 160)
0
Cash atperiod start
Net cash fromoperations
Net cash frominvestingactivities
Net cash fromfinancingactivities
Cash atperiod 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
20
www.cxense.com
Market and strategy
www.cxense.com
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
22
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.
23
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
24
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
25
www.cxense.com
Summary and outlook
www.cxense.com
• 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
27
www.cxense.com
Appendix
28
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)
29
www.cxense.com
USD 1,000
369
663
429384 395
637
240
516
429446
271
610
413 418
290
514
373
469
(417)
(223)
(130) (122)(162)
(360)
(131) (131)
(691)(800)
(600)
(400)
(200)
0
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
30
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)
31
www.cxense.com
Balance sheet
USD 1,000 As at 31 Mar 2017 As at 31 Mar 2016Non-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
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
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 TIMESUBSEQUENT 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-LOOKINGINFORMATION 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 THEINFORMATION 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
34
