Textura q3 14 earnings release 11.4.2014 final

1©2014 Textura Corporation

Textura Corporation – Quarter Ended September 30, 2014

Image: Hudson Yards Redevelopment, New York, NY –a project managed using Textura Construction Collaboration Solutions


Safe Harbor

This presentation includes forward-looking statements, including statements regarding Textura's future financial performance, market growth, total addressable market, demand for Textura's solutions, and general business conditions. Any forward looking statements contained in this presentation are based upon Textura's historical performance and its current expectations and projections about future events and financial trends affecting the financial condition of its business. These forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. These forward-looking statements are based on information available to Textura as of November 5, 2014, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause such differences include, but are not limited to, trends in the global and domestic economy and the commercial construction industry; our ability to effectively manage our growth; our ability to develop the market for our solutions; competition with our business; abnormal severe winter weather conditions; our dependence on a limited number of client relationships for a significant portion of our revenues; our dependence on a single software solution for a substantial portion of our revenues; the length of the selling cycle to secure new enterprise relationships for our CPM solution, which requires significant investment of resources; our ability to cross-sell our solutions; the continued growth of the market for on-demand software solutions; our ability to develop and bring to market new solutions in a timely manner; our success in expanding our international business and entering new industries; and the availability of suitable acquisitions or partners and our ability to achieve expected benefits from such acquisitions or partnerships, including our acquisition of Latista in December 2013. Forward-looking statements speak only as of November 5, 2014 and we assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable laws. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements. Further information on potential factors that could affect actual results is included under the heading “Risk Factors” in our Annual Report on Form 10-K filed on November 26, 2013 and our other reports filed with the SEC.

This presentation should be read in conjunction with Textura’s September 2014 Earnings Release on the Company’s Investor Relations website at investors.texturacorp.com.

In addition to U.S. GAAP financial information, this presentation includes certain non-GAAP financial measures. These historical and forward-looking non-GAAP measures are in addition to, not a substitute for or superior to, measures of financial performance prepared in accordance with GAAP. A reconciliation between GAAP and non-GAAP measures is included in Textura’s September 2014 Earnings Release on the Company’s Investor Relations website at investors.texturacorp.com, and at the end of this presentation.

http://investors.texturacorp.com/

http://investors.texturacorp.com/


Introduction and Review of Key Highlights

Image: Hudson Yards Redevelopment, New York, NY –a project managed using Textura Construction Collaboration Solutions

Patrick AllinChairman, CEO, Co-founder


Current Business Processes – Complex, Error Prone, Inefficient

Banks / Insurers

Title Company

Owner / Developer

Sub-contractorsEngineers

Architects

GeneralContractors

Suppliers

ArchitectsFinancing

CompaniesInsurance

Companies

Owner/Developer

GC

Prime Sub Prime Sub

Sub

Material Supplier

Sub Sub Sub

Sub-tier Sub-tier

Sub-tier

Etc.

. . . Material Supplier

Material Supplier

. . .

Sub . . .

Prime Sub . . .

Title Companies

Engineers . . .

DesignPre-

qualificationBid Contracting Construction Close-out


Textura Solutions – Addressing the Project Lifecycle

DesignPre-

qualificationBid Contracting Construction Close-out

CPM

PlanSwiftSubmittalExchange

GradeBeam

PQMSubmittalExchange

LatistaBidOrganizer


Approx. $28 billion of Total Addressable Market

MarketExpansion

MonetizationTotal

Addressable Market

TargetGlobal

Markets~$4.8t

Markets Currently

Served~$1.3t

CurrentSolutions~30 bps

Total Future

AddressableMarket~$28.0bCurrent

Marketsand

Solutions~$4.4b

ExpandedPlatform~50 bps

Key Strategies:• North America market

penetration• Global expansion to Asia

and Western Europe

Key Strategies:• Cross-sell solutions• Strategic acquisitions• Solution expansion• Solutions to platform• Pricing

Result:

• Potential for very high long-term revenue growth rates

Expanded Platform

~55-60 bps

CurrentSolutions~34 bps

Mobile+~5–10 bps

Mobile+~4 bps

~$3.9b

Mobile+~$0.5b

~$24.0b

~$4.0b


Multiple Long-term Growth Opportunities

Marketpenetration

Cross-sellsolutions

Globalexpansion

Relatedmarkets

Strategicacquisitions

Newproducts

Future

US, Canada, Australia

Western Europe,

Developed Asia

Mining

Oil and Gas

Data

Financing

Price

• Approx. 10% penetration

• 7 primary solutions

• Few multi-product clients

• Bundled sales/pricing

• Platform strategy

• Project lifecyclefrom design to operation

• Integrated solutionsuite

SubmittalExchange

GradeBeam

PlanSwift

CPM

PlanSwiftSubmittalExchange

GradeBeam

PQM

BidOrganizer

Latista


Recent Highlights – Continuing to Execute our Strategy

• Year-over-year revenue growth of 51%

• Organic revenue growth of 43%

• Approximately $155 billion in construction value active on our solutions

Pricing Power

Strong Quarterly Results

Operating Leverage

Growth Strategy

• Improving gross margins, EPS and cash flow trajectory

• Adjusted gross margins from 81% in prior quarter to 82%

• Adjusted EPS loss improved from $0.12 in prior quarter to $0.07

• Positive operating cash flow in the quarter and year-to-date periods

• Increased functionality and expanding market of existing solutions

• Continued integration of solutions and progress towards platform

• Opened first Textura Europe office near London

• Implemented CPM price increase for sub usage fees

• Effective on all new projects after February 1

• Expected to add 2 to 3 basis points of revenue on subcontracted contract value


Quarter Ended September 30, 2014

Financial Overview

Image: Denver International Airport South Terminal Redevelopment, Denver, CO

– a project managed using Textura Construction Collaboration Solutions

Jillian SheehanEVP and CFO


Quarter Ended September 30, 2014 Highlights

• 51% year-over-year revenue growth

• Organic revenue growth of 43%

Balance Sheet

Adjusted EPS

Strong Revenue Growth

Expense Trends

Adjusted EBITDA

• 14% Adjusted operating expense growth

• Continuing to see leverage in business model

• Continuing to invest in the development of our solution suite

• $1.0 mm Adjusted EBITDA loss vs. $2.2 mm loss in prior quarter

• Focus on supporting growth and strategic initiatives

• Loss narrowing as a percent of revenue

• $0.07 Adjusted EPS loss vs. $0.12 loss in prior quarter

• Adjusted net loss of $1.8 million vs. $3.0 million in June 2014 quarter

• Weighted-average share count increased to 25.4 million

• $66.0 million cash position at September 30, 2014

• Ample liquidity to fund our growth initiatives


Consistently High Growth Rates

$12.9

$24.0

$40.8

CY11 CY12 CY13

87% 86% 70%

Year-over-year change

51% 65% 65% 72% 77% 61% 60% 51%

Year-over-year change

45% 46% 38% 45% 50% 46% 52% 43% 77% 69% 69%

Organic growth Organic growth

$6.8

$8.5

$9.4

$10.9

$12.0

$13.8

$15.0

$16.4

Dec 12 Mar 13 Jun 13 Sep 13 Dec 13 Mar 14 Jun 14 Sep 14


Strong Operating Metrics

Projects Added

Client Reported Construction Value Added

Active Projects

$7.3

$10.6

$13.6

$23.7

$17.9

$19.5 $17.7 $18.2


5,046 5,263

5,701

6,225 6,580

7,052

7,578

8,030


1,048

1,245

1,467 1,511 1,466

1,712 1,729 1,792



Revenue Model – Broad Base of Paying Customers

• Revenue from multiple participants

• Fees are invoiced and collected in advance

• CPM - highly sticky, recurring, and visible

CPM

PlanSwift

SubmittalExchange

GradeBeam

PQM

Activity-driven

• Owners/GCs• Subscription fees based on

project activity –total number of projects/construction value

• Subcontractors• Contract usage fee – varies by

value of contract and subject to minimum and maximum fees

Organization-driven

• Primarily organization annual subscription fees

• Fees based on:• Construction volume,

number of offices/subcontractors

BidOrganizer

Latista


2014 Guidance

• 45 – 48% year-over-year revenue growth

• $17.4 – $17.8 million

• Adjusted EPS of ($0.02) – ($0.04)

• Excludes stock based comp of $2.0 million & amortization of acquired intangible assets of $1.1 million

• Assumes ~25.5 million shares

Quarter Ended December 31,

2014

Year Ended December 31,

2014

• 53 - 54% year-over-year revenue growth

• $62.5 – $62.9 million

• Adjusted EPS of ($0.37) – ($0.39)

• Excludes stock based comp of $8.5 million & amortization of acquired intangible assets of $5.0 million

• Assumes ~25.2 million shares


Long-term Operating Model Yields Highly Attractive Margins

CY2013March2014

Quarter

June 2014

Quarter

September 2014

Quarter

CY2014Guidance

Target Future Model

(2 to 3 yrs.)

Revenue $40.8

Million$13.8

million$15.0

million$16.4

million$62.5 - $62.9

million$150 – 180

million

Adjusted operating expenses* as % of revenue:Cost of servicesGeneral and administrativeSales and marketingTechnology and development

Total adjusted operating expenses*

22%44%30%41%

137%

20%35%33%37%

124%

19%36%29%30%

115%

18%31%29%28%

106%

10% - 13%13% - 15%17% - 20%15% - 17%

55% - 65%

Adjusted gross margin* 78% 80% 81% 82% 87% - 90%

Adjusted EBITDA margin (37)% (24)% (15)% (6%) (15) - (16)% 35% - 45%

* See the reconciliation of these non-GAAP measures to the most comparable GAAP measures in the tables included at the end of this presentation.


Image: World Trade Center Transportation Hub, New York, NY –a project managed using Textura Construction Collaboration Solutions

Questions . . . and Thank You


Appendix

Reconciliation of non-GAAP measures

to the most comparable GAAP measures


Quarter Ended March 31, 2014

GAAP

Share-Based

Compensation

and

Amortization of

Intangible

Assets

Other Non-

Recurring

Expenses * As Adjusted

% of

Revenue

Revenues 13,787$ -$ -$ 13,787$ 100%

Operating expenses

Cost of services 2,882 152 - 2,730 20%

General and administrative 6,055 1,191 74 4,790 35%

Sales and marketing 4,843 312 - 4,531 33%

Technology and development 5,356 281 - 5,075 37%

Depreciation and amortization 1,886 1,282 - 604 4%

Total operating expenses 21,022 3,218 74 17,730 129%

Total operating expenses, excluding

depreciation and amortization

19,136 1,936 74 17,126 124%

Loss from operations (7,235) (3,218) (74) (3,943)

Total other expense, net (25) - - (25)

Loss before income taxes (7,260) (3,218) (74) (3,968)

Income tax provision 80 - - 80

Net loss (7,340)$ (3,218)$ (74)$ (4,048)$

Gross profit 10,905$ 11,057$

Gross margin 79% 80%

Adjusted EBITDA ** (3,339)$

Adjusted EBITDA Margin (24%)

* Other non-recurring expenses represent acquisition-related costs.

** Adjusted EBITDA represents revenue less adjusted operating expenses, excluding depreciation and amortization.

(dollars in thousands)


Quarter Ended June 30, 2014

GAAP

Share-Based

Compensation

and

Amortization of

Intangible

Assets As Adjusted

% of

Revenue

Revenues 14,965$ -$ 14,965$ 100%

Operating expenses

Cost of services 3,028 156 2,872 19%

General and administrative 6,473 1,049 5,424 36%

Sales and marketing 4,663 324 4,339 29%

Technology and development 4,819 301 4,518 30%

Depreciation and amortization 1,962 1,282 680 5%

Total operating expenses 20,945 3,112 17,833 119%



18,983 1,830 17,153 115%

Loss from operations (5,980) (3,112) (2,868)

Total other expense, net (8) - (8)

Loss before income taxes (5,988) (3,112) (2,876)

Income tax provision 80 - 80

Net loss (6,068)$ (3,112)$ (2,956)$

Gross profit 11,937$ 12,093$


Adjusted EBITDA * (2,188)$


* Adjusted EBITDA represents revenue less adjusted operating expenses, excluding depreciation and amortization.




GAAP

Share-Based

Compensation

and

Amortization of

Intangible

Assets

Other Non-

Recurring


% of

Revenue

Revenues 16,354$ -$ -$ 16,354$ 100%

Operating expenses

Cost of services 3,335 90 344 2,901 18%

General and administrative 6,232 1,049 120 5,063 31%

Sales and marketing 5,869 586 592 4,691 29%

Technology and development 6,366 913 802 4,651 28%

Depreciation and amortization 1,990 1,282 - 708 4%

Total operating expenses 23,792 3,920 1,858 18,014 110%



21,802 2,638 1,858 17,306 106%

Loss from operations (7,438) (3,920) (1,858) (1,660)


Loss before income taxes (7,460) (3,920) (1,858) (1,682)


Net loss (7,540)$ (3,920)$ (1,858)$ (1,762)$

Gross profit 13,019$ 13,453$


Adjusted EBITDA ** (952)$


* Other non-recurring expenses include severance expense and acquisition-related and other expenses. Acquisition-related

and other expenses represent acquisition, strategic transaction and certain tax-related costs.




Year Ended December 31, 2013

GAAP

Share-Based

Compensation

and

Amortization

of Intangible

Assets

Other Non-

Recurring


% of

Revenue

Revenues 40,766$ -$ -$ 40,766$ 100%

Operating expenses

Cost of services 12,808 2,198 1,446 9,164 22%

General and administrative 25,152 5,700 1,501 17,951 44%

Sales and marketing 15,153 2,789 308 12,056 30%

Technology and development 20,820 2,863 1,288 16,669 41%

Depreciation and amortization 5,325 3,397 - 1,928 5%

Total operating expenses 79,258 16,947 4,543 57,768 142%



73,933 13,550 4,543 55,840 137%

Loss from operations (38,492) (16,947) (4,543) (17,002)

Total other expense, net (2,530) - - (2,530)

Loss before income taxes (41,022) (16,947) (4,543) (19,532)

Income tax provision (767) (1,086) 319

Net loss (40,255)$ (16,947)$ (3,457)$ (19,851)$

Gross profit 27,958$ 31,602$




* Other non-recurring expenses include offering-related expense and acquisition-related and other expenses. Acquisition-related


** Adjusted EBITDA represents revenue less adjusted operating expenses, excluding depreciation and amortization and excluding

change in fair value of conversion option liability.




GAAP

Share-Based

Compensation

and

Amortization of

Intangible

Assets

Other Non-

Recurring


% of

Revenue

Revenues 10,853$ -$ -$ 10,853$ 100%

Operating expenses

Cost of services 3,532 160 550 2,822 26%

General and administrative 6,405 922 301 5,182 48%

Sales and marketing 3,172 142 3,030 28%

Technology and development 4,445 176 4,269 39%

Depreciation and amortization 1,358 840 518 5%

Total operating expenses 18,912 2,240 851 15,821 146%



17,554 1,400 851 15,303 141%

Loss from operations (8,059) (2,240) (851) (4,968)


Loss before income taxes (8,253) (2,240) (851) (5,162)


Net loss (8,321)$ (2,240)$ (851)$ (5,230)$

Gross profit 7,321$ 8,031$




* Other non-recurring expenses include offering-related expense and acquisition-related and other expenses. Acquisition-related





Adjusted EPS

September 30, 2014 June 30, 2014

Net loss per share (0.30)$ (0.24)$

Share-based compensation expense 0.10 0.07

Amortization of intangible assets 0.05 0.05

Severance expense 0.06 -

Acquisition-related and other expenses * 0.02 -

Adjusted EPS (0.07)$ (0.12)$

* Acquisition-related and other expenses represent acquisition, strategic transaction and certain tax-related costs.

Three Months Ended


Guidance

High End Low End High End Low End

Net loss per share (0.14)$ (0.16)$ (0.98)$ (1.00)$

Accretion of redeemable non-controlling interest - - 0.01 0.01

Share-based compensation expense 0.08 0.08 0.33 0.33

Amortization of intangible assets 0.04 0.04 0.19 0.19

Acquisition-related and other expenses* - - 0.02 0.02

Severance expense - - 0.06 0.06

Adjusted EPS (0.02)$ (0.04)$ (0.37)$ (0.39)$

* Acquisition-related and other expenses represent acquisition, strategic transaction and certain tax-related costs.

Three Months Ended December 31, 2014 Twelve Months Ended December 31, 2014

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