7/28/2019 Investor Presentation Q1 2013 Barclays
1/22
Copyright 2013 Demandware, Inc20 May 2013 1
Copyright 2013 Demandware, Inc. All other rights reserved.20 May 2013 1
First-Quarter 2013
Scott Dussault
Chief Financial Officer
7/28/2019 Investor Presentation Q1 2013 Barclays
2/22
Copyright 2013 Demandware, Inc20 May 2013 2
Forward-Looking Statements
This presentation includes forward-looking statements. Demandware, Inc. (Demandware or the Company) has based theseforward-looking statements largely on its current expectations and projections about future events and financial trends affecting itsbusiness. Forward-looking statements should not be read as guarantees of future performance or results, and will not necessarilybe accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements arebased on information available at the date of this presentation and managements good faith belief as of such date with respe ct tofuture events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially fromthose expressed in or suggested by the forward-looking statements. Important factors that could cause such differences include,but are not limited to:the Companys ability to attract new clients to enter into subscriptions for its solution; the Companys ability to service those clientseffectively and induce them to renew and upgrade their deployments of the Companys solution; the Companys ability to expandits sales organization to address effectively the new industries, geographies and types of organizations the Company intends to
target; the Companys ability to accurately forecast revenue and appropriately plan its expenses; continued acceptance of SaaSas an effective method for delivering software solutions; the Companys ability to protect and defend its intellectual property;costs associated with defending intellectual property infringement and other claims; events in the markets for the Companyssolution and alternatives to the Companys solution, as well as in the United States and global markets generally; changes in thecompetitive environment in the Companys industry and the markets in which the Company operates; and other factors discussedunder Risk Factors and Managements Discussion and Analysis of Financial Condition and Results of Operations in periodic filings with the Securities and Exchange Commission (the SEC). In addition, in this presentation, the words believe, may,
will, estimate, continue, anticipate, intend, expect, predict, potential and similar expressions, as they relate to theCompany, business and management, are intended to identify forward-looking statements. In light of these risks and uncertainties,the future events and circumstances discussed in this presentation may not occur, and actual results could differ materially from
those anticipated or implied in the forward-looking statements. Forward-looking statements speak only as of the date of thispresentation. You should not put undue reliance on any forward-looking statement. The Company assumes no obligation toupdate any forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affectingfuture performance or results, except to the extent required by applicable laws. If the Company updates one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those or other forward-looking statements.
7/28/2019 Investor Presentation Q1 2013 Barclays
3/22
Copyright 2013 Demandware, Inc20 May 2013 3
Key Investment Highlights
Large Addressable Market with Strong Macro Tailwinds
Leading On-Demand eCommerce Platformwith Large Partner Ecosystem
Differentiated, Proprietary SaaS TechnologyCreates Strong Barriers to Entry
Multiple Avenues to Drive Future Growth
Powerful SaaS Financial Model
Experienced and Deep Management Team
7/28/2019 Investor Presentation Q1 2013 Barclays
4/22
Copyright 2013 Demandware, Inc20 May 2013 4
Significant Momentum: On-Demand isIn Demand!
Mar. 31, 2009
$260K
60
28
$2.5M
50%
Mar. 31, 2013
$487K
630
156
$18.9M66% CAGR
79%
100% SaaS
7/28/2019 Investor Presentation Q1 2013 Barclays
5/22
Copyright 2013 Demandware, Inc20 May 2013 5
$327 Billion
Global ecommerce
Demandware Is at the Confluence ofThree Significant Markets
Data Reflects 2011Source: Forrester (US Online Retail) andEuromonitor (Global Retail and GlobaleCommerce)
10%
CAGR(11 16)
20%
CAGR(11 16)
$14 Billion
Global Saas
$12 Trillion
Global Retail
7/28/2019 Investor Presentation Q1 2013 Barclays
6/22
Copyright 2013 Demandware, Inc20 May 2013 6
Global Retail Market Shifting fromOffline to Online
Digital TVContentWebSites
Ad Networks
NFCGeolocation
Services
Check OutOn Smart
Phone
mPOSClientelingMobile EndlessAisle
SocialMedia
TabletCall CenterQREnabledPrint Ads
Laptop /Desktop
eCommerce: An Essential Requirement for Retailers / Brands Today
2004 PRESENT FUTURE
Buying and Selling AcrossMultiple Touch PointsConnected, In Control
Always On, AlwaysConsuming
Consumers
Deliver ExceptionalOnline Experience
Retailers /Brands
7/28/2019 Investor Presentation Q1 2013 Barclays
7/22
Copyright 2013 Demandware, Inc20 May 2013 7
Traditional ecommerce Solutions HaveBeen Limited
Build and Run InternallyStore Front
Portal
Shopping
Cart
Admin Portal
User Interface
CatalogManagement
Order
Management Promotion &
Pricing
BusinessRules
Accounting Content
Management
CustomerManagement
Scheduling
Security
eCommerceInfrastructure
Warehouse
Manageme
nt
POSConnectors
The Pros: Control
Customization
The Cons: Costly
IT-Constrained
Performance/Security Responsibility
Slow Pace of Innovation
7/28/2019 Investor Presentation Q1 2013 Barclays
8/22
Copyright 2013 Demandware, Inc20 May 2013 8
Build and Run Internally Outsource / ASP
Traditional ecommerce Solutions HaveBeen Limited
The Pros: Less Hassle
No Infrastructure
The Cons: Inflexible
No Merchant Control ofMerchandising
Limited Customization
The Pros: Control
Customization
The Cons: Costly
IT-Constrained
Performance/Security Responsibility
Slow Pace of Innovation
7/28/2019 Investor Presentation Q1 2013 Barclays
9/22
Copyright 2013 Demandware, Inc20 May 2013 9
Build and Run Internally Outsource / ASP
Demandware Delivers The Best ofBoth Worlds
A Unique and Better Approach to Digital Commerce
The Pros:
Control
Customization
The Cons:
Costly
IT-Constrained
Performance/Security
Responsibility
Slow Pace of Innovation
The Pros:
Less Hassle
No Infrastructure
The Cons:
Inflexible
No Merchant Control ofMerchandising
Limited Customization
The Best of
Both Worlds
7/28/2019 Investor Presentation Q1 2013 Barclays
10/22
Copyright 2013 Demandware, Inc20 May 2013 10
The Demandware SaaS Model
Significant Barriers to Entry
MerchantEmpowerment
Provides Full Control
Ease ofDevelopment
Open Development Environment;Flexible, Extensible
Cutting EdgeAccess to Steady Stream of New,
InnovativeFunctionality as Soon as it
Becomes Available
EasySimplifies Complex eCommerceFunctionality
FastTime-to-Market Only 6 Months
No Infrastructure Cloud Solution
Todays DifferentiatorsInitial Table Stakes
Reliable andProven99.99%
Platform Availability
FullyCustomizable+
7/28/2019 Investor Presentation Q1 2013 Barclays
11/22
Copyright 2013 Demandware, Inc20 May 2013 11
Allowing Retailers to Focus onInnovation and Growth
Ease ofLaunching and Managing
Multiple ecommerce Sites
Speed toUtilize New
Technologies/Techniques
Enablement ofMerchandising Goals
The Payoff to Customers
Ability to Innovate atthe Pace of ConsumerExpectations:
EnablesSeamless Omni-channel BrandExperience forConsumers Globally
$
IncreasedRevenues
7/28/2019 Investor Presentation Q1 2013 Barclays
12/22
Copyright 2013 Demandware, Inc20 May 2013 12
Leading Brands Choose Our Model
28 32 3840
46 53 60 6975 78
91 101110
124137
151 156
6070
95 104123
143
175
215237
253
321
361
402
445
517
579
630
Customers
Sites
09 10 11 12 13
http://www.google.com/imgres?imgurl=http://i.bnet.com/blogs/crocs_logo.jpg&imgrefurl=http://www.bnet.com/blog/secdocuments/crocs-footwear-loses-novelty/152&usg=__oJfzhKbM4XwgKQv6ooT5lFIZZ_c=&h=377&w=328&sz=24&hl=en&start=2&zoom=1&tbnid=04ndiMJtLrzj0M:&tbnh=122&tbnw=106&ei=yGCiTbf_ErCN0QHxmOyMBQ&prev=/images?q=crocs+logo&hl=en&biw=1276&bih=813&gbv=2&tbm=isch&itbs=17/28/2019 Investor Presentation Q1 2013 Barclays
13/22
Copyright 2013 Demandware, Inc20 May 2013 13
13Copyright 2012 Demandware, Inc. CONFIDENTIAL |
7/28/2019 Investor Presentation Q1 2013 Barclays
14/22
Copyright 2013 Demandware, Inc20 May 2013 14
Key Financial Highlights
Growth VisibilityOperatingLeverage
Growth in Customersand Sites
87% Revenue CAGR
(2006-12) Customer Lifetime
Value
100% Cloud Model
Highly Visible andPredictable
High Dollar-Valueand CustomerRetention
Highly LeverageableMargins
Capital Efficient
Long-Term Scale andProfitability
7/28/2019 Investor Presentation Q1 2013 Barclays
15/22
Copyright 2013 Demandware, Inc20 May 2013 15
15Copyright 2012 Demandware, Inc. CONFIDENTIAL |
2009 2010 2011 2012 3 Month 2012 3 Month 2013
Revenue Growth Momentum
79%
64%
Annual Revenue Growth
$ in Millions
Pro-Forma* Three MonthRevenue Growth
$ in Millions
Services Subscription
$16.1
$28.7
$21.4
$36.7
$14.2
$12.2
$18.9
$20.555%
$47.2
$56.5
44%$79.5
$67.9
* Pro-forma excludes $1.9 mm from Neckermann GmbH
7/28/2019 Investor Presentation Q1 2013 Barclays
16/22
Copyright 2013 Demandware, Inc20 May 2013 16
Significant Growth in Customers and Sites
2008
16 17 19 23 2832 38
40 46 5360 69
75 7891 101
110124 137
151 156
39 39 4350 60
7095
104123
143175
215237
253
321361
402
445
517
579
630
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Customers
Sites
2009 2010 2011 2012 13
7/28/2019 Investor Presentation Q1 2013 Barclays
17/22
Copyright 2013 Demandware, Inc20 May 2013 17
Driving Significant Revenue Momentum
$1.8
$3.7$4.3
$6.3$5.5
$6.1$6.9
$10.2$9.3
$10.4$11.2
$16.3
$13.6
$15.2$16.3
$22.9
$18.9
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Overage Subscription Revenue
* Average for 2009, 2010, 2011 and 2012
Subscription Revenue: Base vs. Overage AverageOverage Fees
Represent
31%* of
Subscription
Revenue
Base Subscription Revenue
2009 2010 2011 2012 13
7/28/2019 Investor Presentation Q1 2013 Barclays
18/22
Copyright 2013 Demandware, Inc20 May 2013 18
Land and Expand Drives Shared SuccessModel
Q1 Q2 Q3 Q4
Year 2
Q1 Q2 Q3 Q4
Year 3
Q1 Q2 Q3 Q4
Year 1
Cohort analysis includes a family of third-party solution partner customers who share a minimum level of subscription revenue and 32 customers all of which have beenoperating on Demandwares platform for a minimum of three years as of December 31, 2012. Analysis excludes two customers operating on the platform for three years oneinvoiced through a third party and Neckermann.
QuarterlyR
evenue
BaseSubscription
CustomerExpansion
$0
$40,000
$80,000
$120,000
$160,000
$200,000Average Subscription Revenue by Quarter (Cohort Analysis)
7/28/2019 Investor Presentation Q1 2013 Barclays
19/22
Copyright 2013 Demandware, Inc20 May 2013 19
High Quality Revenue:Diversified, Predictable and Sticky
* Subscription Dollar Retention Rate Defined on page 42 of the Form 10-K.
International Scope
International41%
U.S.59% Customers
with Sites in20+ Countries
Customer Variety
Diversified
and Sticky
TypicalContract:3 Years
2010 2011 2012
100+% 100+% 100+%SubscriptionDollar
RetentionRate*
Other
Sporting Goods
Home & Garden
Health & Beauty
GeneralMerchandise
Apparel
7/28/2019 Investor Presentation Q1 2013 Barclays
20/22
Copyright 2013 Demandware, Inc20 May 2013 20
Non-GAAP Operating Margin:Quarterly
Path to Profitability and High OperatingLeverage
$(24.3)M $(9.6)M
$2.0M $0.7M
$(0.1)M
2008 2009 2010 2011 2012
$0.3
($0.1) ($0.4)
$2.1
($0.5)($0.9)
($1.2)
$3.4
($1.5) (2.8) ($1.4)
$5.6
($3.3)
Non-GAAP Operating Margin:
Annual
2010
Non-GAAPOperatingMargin*
Non-GAAPOperatingMargin %*
2011 2012
*Non-GAAP excludes stock-based compensation expense.
2013
7/28/2019 Investor Presentation Q1 2013 Barclays
21/22
Copyright 2013 Demandware, Inc20 May 2013 21
Key Investment Highlights
Large Addressable Market with Strong Macro Tailwinds
Leading On-Demand eCommerce Platformwith Large Partner Ecosystem
Differentiated, Proprietary SaaS TechnologyCreates Strong Barriers to Entry
Multiple Avenues to Drive Future Growth
Powerful SaaS Financial Model
Experienced and Deep Management Team
7/28/2019 Investor Presentation Q1 2013 Barclays
22/22
Copyright 2013 Demandware, Inc20 May 2013 22 Copyright 2013 Demandware, Inc. All other rights reserved.20 May 2013 22
First-Quarter 2013
Scott Dussault
Chief Financial Officer