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Q4 2015 results19 February 2016
2
CXENSE:OSE today
Sector Software-as-a-Service
Customers All companies with online sites and apps
Revenues NOK 200 million annualized – and growing
Recurring software license fees
Gross margin ~85%
Organization 175 employees in Europe, Americas and Asia
3
People want relevant and engaging online experiences
Personalization needed
4
Why personalization?
Improved user experience
More engagement
Higher conversion
Increased revenue
5
Cxense offers the world’s leading personalization software
Real time, actionable data = Higher conversion = Increased revenue
Cxense enables businesses to gather,
analyze and use data…
...to create more personal and engaging
user experiences…
…increasing Cxense’s customer’s digital
revenue
6
>1.4bn devices interacted with Cxense’s technology in Q4
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
# Events interacting with Cxense # Devices interacting with Cxense
0
5
10
15
20
25
30
35
40
45
Billion
0
250
500
750
1000
1250
1500
Million
7
Growing customer base and adoption across verticals
VerticalsTime
Media
Publishers and
Broadcasters
Sports
Consumer brands
Financial services
e-commerce and
classifieds
Cxense customers Q4’15
8
389619
8871 065 1 110
1 5001 708
3 212
4 174 4 115 4 140 4 1523 881
3 540
4 818
6 056
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
Group revenue*USD 1 000
Revenue development
*Figures for period Q2’12 to Q1’13 are restated to exclude the discontinued operations of PPN AG
9
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
• Minimize churn
• Sharp focus on core, most value-enhancing products for customers
• Cost effectiveness
• Focused R&D investments to maintain and develop uniqueness
• Streamlining a market-oriented organization to enhance sales efficiency
• Financial flexibility
Revenue growth
Profitability
Scalability
10
Financials
11
1,7 1,8
1,9
3,5
0,6
0,8
0,0
1,0
2,0
3,0
4,0
5,0
6,0
7,0
Q4'14 Q4'15
Ad Network
Personalization Suite
Advertising Solutions
6.1
+45%
4.2
• Strong personalization trend drives
Cxense’s growth • Personalization Suite growth of 84%
• Currency adjusted Q4 2015 revenues of
USD 6.5 million • Currency adjusted YoY growth of 55%
PCAN Business Segment
SaaS Business Segment
SaaS Business Segment
Personalization Suite: DMP, analytics, content, video and search productsAdvertising Solutions: Display, CXAD and Maxifier products
USD appreciation vs invoicing currencies
Revenue USD million per quarter
45% YoY revenue growth
12
Record number of new contracts in Q4 2015
New contracts per quarter
11
14
11
7
11
2122
34
31
37
31
41
Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15
• 41 new contracts
• >90% Personalization Suite
• 25 on new customers
• 16 up-sell on existing customers
• Annualized recurring revenue (ARR) of
new contracts closed in the quarter:
USD 1.54 million
13
Decreasing churn over the last quarters
• Churn in H2 2015 back at normal
levels
• H1 2015 churn was higher than normal due to losses on advertising portfolio
• Sales efficiency increasing over time
1 320 1 404
1 476
2 652
1 716 1 536
964 1 100
1 784
1 032
2 441
1 650
(212)(308)
(1 668)
(892)
(520) (489)
(2 000)
(1 500)
(1 000)
(500)
-
500
1 000
1 500
2 000
2 500
3 000
Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15
Annualized Recurring Revenue (ARR) on contracts closed in the quarter
New ARR effect in reported figures
Lost ARR (churn)
1 Annualized recurring revenue effect of quarterly performance
14
3,54
4,82
6,06
-3,09
-2,13
-1,41
Q2'15 Q3'15 Q4'15
Revenues
EBITDA
• Strong organic growth in new recurring
software license revenue
• Acquired growth and cost synergy
capture
• Gross profit improvement
• On track for EBITDA break-even
USD million
+0.4m Net new SaaS so far in ‘16
+1.02m organic growth,
i.e. 29% in 2H 2015
+1.50m acquired
Strong growth and EBITDA improvement in H2 2015
15
PCAN
segment
increase
Restructuring
one-off
provision
estimate Q1
2016
Q4 2015
OPEX
adjusted
Q1 2016
net run
rate effect
of ongoing
reduction
OPEX
adjusted
run rate
level
Q2 2016
run rate
effect of
ongoing
reduction
• Q1 2016 OPEX measures
• R&D focused towards Personalization Suite development
• Reducing R&D activity at high-cost locations, increasing at low-cost locations
• Targeted net effect of USD 750
thousand per quarter
• Main impact will be seen in Q2 2016
• One-off restructuring provision of about USD 350 thousand expected in Q1 2016
Quarterly group OPEX – reported vs “run-rate” USD 1 000
6 188
5 538
100 (100)350
(650)
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
R&D re-focusing saves USD 750 thousand per quarter
16
Q4 2105 cash flow developmentUSD 1 000
Waterfall cashflow
2 131
(2 192)
10 3965 829
(4 507)
Cash at periodstart
Net cash fromoperations
Net cash usedin investing
activities
Net cash fromfinancingactivities
Cash at periodend
• Cash flow from operations:
• USD – 2.2 million reported
• USD – 1.45 million adjusted for the first Ramp billing run and for R&D refund booked in Q4 but not paid by 31.12.2015
• Cash flow from investing activities
• Ramp acqusition USD 4 million
• Capitalized R&D cost of USD 0.5 million
• Net proceeds from share issues of USD 10.6
million to fund acqusition and growth captial
• Strong outgoing cash position of USD 5.8
million
Cash flow and cash position
17
Operations
18
Creating value with personalization for WSJ
Subscriber conversion with
Cxense technology:
+ 200%
Increase in monthly new
subscribers
19
Turn anonymous visitors into loyal customers
Data is gathered & analyzed
Individual user profiles are created
Users are shown content & ads that
match their interest, intent & context
Users are shown products & services
that they are most likely to buy
Loyalty & advocacy grows
Understand
Engage
Convert
Advocate
“In fact, by 2018, sellers that have fully invested in all types of digital personalization are expected to outperform companies that have not invested in personalization technologies by 30%.“
Gartner, IT Market Clock for Digital Commerce, 2015, August 19, 2015
20
Robust data capture methods across sites
for any and all devicesThe richest user profiles in the market Real-time personalization
Drives conversion
Unique technology drives customer value
21
Continuous focus on scalability to grow Cxense
Sales efficiency Focus on Customer Success
Standardized delivery model A global support center
192252
384
0
200
400
600
2013 2014 2015
Gross new ARR / Sales rep
10,5
7,0
2,9
0,0
5,0
10,0
15,0
2013 2014 2015
Months to recover "Cost of Onboarding"
Churn Q2-Q4 2015
Customer Satisfaction on Support tickets
892
520 489
0
200
400
600
800
1000
Q2 Q3 Q4
96,80% 97,13% 98,77%
0,00%
50,00%
100,00%
Q2 Q3 Q4
Summary and outlook
23
Summary and Outlook
• All-time-high revenues in Q4, +26% sequentially, +45% YoY
• Increase in up-sell towards existing clients, reduced churn, adding new customers
• Continued cost effectiveness efforts; on target for 2016 EBITDA profitability
• Strengthened scalability, R&D and sales capabilities moving into 2016
• Well positioned in a growing digital economy with real-time data management and
personalization offering
24
Appendix
25
Revenue increase and profitability improvement vs last quarter
Growth effects Change
USD 1 000 Q2 2015 Q3 2015 Acquired Organic Q4 2015 q/q
Revenues 3 540 4 818 6 056 26 %
SaaS segment 2 954 4 183 792 316 5 291 26 %
PCAN segment 620 675 130 805 19 %
Inter-segment elimination (34) (39) 0 (39)
Gross profit 2 426 3 646 693 347 4 686 29 %
Gross margin SaaS segment 1 83 % 85 %
Gross margin PCAN segment 0 24 % 22 %
OPEX 5 518 5 779 6 093
Non-IFRS OPEX adjustments (901) (523) 95
OPEX adjusted 4 617 5 256 824 108 6 188 18 %
EBITDA (3 092) (2 134) (1 407) 34%
EBITDA adjusted (2 191) (1 611) (131) 239 (1 502) 7 %
26
Income Statement
USD 1 000 Q4 2015 Q4 2014
Revenues consolidated 6 056 4 151
Cost of goods sold 1 371 980
Employee benefit expense 4 079 4 633
Depreciation & Amortisation expense 720 365
Other operating expense 2 014 2 123
Total operating expense 8 184 8 100
Net operating income/(loss) (2 128) (3 949)
Net financial income/(expense) 156 89
Share of profit from associated companies (690) -
Net income/(loss) before taxes (2 663) (3 861)
Income tax expense 110 264
Net income/(loss) for the period (2 773) (4 125)
27
Consolidated Statement of Financial Position
USD 1 000 As at 31 Dec 2015 As at 31 Dec 2014
Non-current assets
Goodwill 14 365 3 807
Deferred tax asset 36 35
Intangible assets 13 181 4 309
Office machinery, equipment,etc. 419 483
Investments in associated companies 2 548 -
Other financial assets 241 197
Total non-current assets 30 789 8 829
Current assets
Trade receivables 3 537 2 150
Other short-term assets 734 1 827
Cash and cash equivalents 5 829 2 828
Total current assets 10 100 6 805
Total Assets 40 889 15 635
Total Equity 27 106 9 385
Non-current liabilities
Deferred tax liabilities 1 060 480
Other long-term liabilities 2 656 -
Total non-current liabilities 3716 480
Non-current liabilities
Trade payables 1 381 1 454
Current taxes 179 119
Other short-term liabilities 8 508 4 196
Total current liabilities 10 068 5 770
Total equity and liabilities 40 889 15 635
28
Cash Flow Statement
Cash flow statement Q4 2015 Q4 2014
Cash flow from operating activities
Profit/(loss) after income tax (including disposal group) (2 773) (4 125)
Adjustments: - -
Income tax payable (17) (107)
Share-based payments 144 135
Share of profit of investments accounted for using the equity method 691 -
Depreciation and amortization 720 365
Impairment - -
Net interest expense - -
Currency translation effects 129 (293)
Change in trade receivables (825) 566
Change in trade payables (142) 264
Change in other accrual and non-current items (117) 934
Net cash flow from / (used in) op. activities (2 192) (2 261)
Cash flow from investing activities
Investment in furniture, fixtures and office machines 28 (6)
Investment in intangible assets (4 534) -
Investment in associated companies - (12)
Investment in subsidiary - -
Net cash effects from disposal subsidiary - -
Net cash flow from / (used in) investing activities (4 507) (18)
Cash flow from financing activities
Net proceeds from share issues 10 396 (416)
Proceeds from minority interest - -
Net cash flow from / (used in) finaning activities 10 396 (416)
Net inc / (dec) in cash and cash equivalents 3 698 (2 695)
29
Global footprint established to support regional customers
OSLO
LONDON
MADRIDNEW YORK
BUENOS AIRES
TOKYO
SINGAPORE
SAMARABOSTON
30
Important notice
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 TIME SUBSEQUENT 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-LOOKING
INFORMATION 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 THE INFORMATION 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