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*CONFIDENTIAL*
*CONFIDENTIAL*
Vision. Insight. Control.
Selectica Investor Overview July 2015
Patrick Stakenas, CEO Jeffrey Grosman, COO
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*CONFIDENTIAL*
Forward Looking Statements
Certain statements in this release and elsewhere by Selectica are forward-looking statements within the meaning of the federal securities laws and the Private Securities Litigation Reform Act of 1995. Such statements may include, without limitation, statements about business outlook, assessment of market conditions, anticipated financial and operating results, strategies, future plans, contingencies and contemplated transactions of the Company. Such forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors which may cause or contribute to actual results of Company operations, or the performance or achievements of the Company or industry results, to differ materially from those expressed, or implied by the forward-looking statements. In addition to any such risks, uncertainties and other factors discussed elsewhere herein, risks, uncertainties and other factors that could cause or contribute to actual results differing materially from those expressed or implied for the forward-looking statements include, but are not limited to the fluctuations in demand for Selectica’s products and services; government policies and regulations, including, but not limited to those affecting the Company’s industry. Selectica undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. Additional risk factors concerning the Company can be found in the Company’s most recent Form 10-K, filed by the Company with the Securities and Exchange Commission.
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*CONFIDENTIAL*
Investment Highlights:
• A Leading provider of SaaS software solutions for enterprise contract + supply management.
• Validated by large, brand name, Global 2000 customers.
• Management team is driving the business with renewed bookings growth and profitability as the goal.
• Recent acquisitions have accelerated growth + improved ability to achieve profitability and scale.
• Market opportunity is large, fragmented and growing.
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*CONFIDENTIAL*
Patrick Stakenas President & CEO
Jeffrey Grosman COO
Todd Spartz CFO
Julien Nadaud* Chief Products Officer
Leo Sigal CTO
Dave Bush Chief Revenue Officer
Rose Lee SVP MarkeAng
Experienced Leadership Team:
* Pending close of b-‐pack acquisiAon
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*CONFIDENTIAL*
Patrick Stakenas:
• Hired by Selectica’s Executive Chairman, Michael Brodsky in January 2014 as the company’s first Chief Strategy Officer (CSO).
• Former Gartner Analyst: Authored numerous forward-looking strategies that helped enterprises + vendors shape their future technology offerings. 2 MQ’s.
• Founder + CEO of ForceLogix Technologies Inc. (TSXV: FLT):
– Developed and launched, industry leading SaaS Sales performance management application(s)
– Led the company to a successful IPO – Ultimate acquisition by CallidusCloud
(NASDAQ: CALD).
• Prior technology positions include: Serving in executive roles at:
– CCC Information Services, FileNet, Inc., and OpenText Corporation
• Served for 14 years with Moore Corporation Ltd. in various management and executive roles.
• Frequent guest lecturer + blogger on procurement, contract lifecycle management, SaaS technology + the importance of creating customer-centric organizations.
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*CONFIDENTIAL*
Metamorphosis of the business model:
< 2013 CPQ +
CLM
July 2014: ECLM+ SM
July/Aug 2015:
ECLM+SM+ S2P
Disjointed Strategy, focused on
Guided Selling, CLM, and
ConfiguraAon
Feb 2014: ECLM
Stage 1: Developed strategy model: Focus on
Enterprise Contract Lifecycle Management
(ECLM) .
Stage 3: Add ‘P2P’ (Procure to Pay) to SM and ECLM,
with the b-‐pack acquisiAon for full “source
to pay” funcAonality
Stage 2: Add Supply
Management (SM) to ECLM with the Iasta AcquisiAon
Team has morphed the business from a disjointed CPQ/CLM company to a full ‘Source to Pay’ solu?ons provider in 2 years….
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*CONFIDENTIAL*
Enterprise Contract Lifecycle Management (ECLM)
• RaAonalizes every step of life cycle for all contracts
• Discovery, authoring, approval, negoAaAon, reporAng
• Clients average 10,000+ contracts under management
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*CONFIDENTIAL*
Supply Management: Upstream Procurement
• Onboarding, managing + analyzing spend with suppliers
• SelecAca parAcularly regarded for complete supply management analyAcs suite
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*CONFIDENTIAL*
Supply Management: Downstream Procurement
• Actually doing the buying against the supplier contracts
• Includes: eCatalogs, order management + invoice management
• SomeAmes referred to as P2P (Procure-‐to-‐Pay)
Pending AcquisiAon
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*CONFIDENTIAL*
Solving Real Business Pain
SelecAca Enterprise Contract Lifecycle Management + Supply Management soluAons allow enterprises the vision, insight, and control necessary to:
MiAgate risk, Reduce cost + Drive revenue
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*CONFIDENTIAL*
Selectica services are Gartner Visionaries: – trending towards Leaders
Supply Management: December 2014
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Procure-‐to-‐Pay: January 2015
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*CONFIDENTIAL*
We Win With Completeness, Insight + Focus
SelecSca Ariba Emptoris Bravo SciQuest ApUus Coupa
Completeness of Enterprise CLM
Completeness of Procurement Suite
Depth of AnalyAcs and Insights
Configurability of SoluAon
Focus on the mid-‐enterprise market
ExcepAonal Capability
High Capability
Some Capability
Minor Capability
No Capability
SelecAca’s deeply integrated analyAcs are differenAated and our client focus is greater than the integrated goliaths (SAP/Ariba and IBM/Emptoris)
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*CONFIDENTIAL*
Significant Opportunity: $7 Billion Total Addressable Market*
*Source: Gartner/Forrester
$M’s Market Growing 12%-‐14% per Year*
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*CONFIDENTIAL*
GROWTH DRIVERS
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*CONFIDENTIAL*
Sales Revitalization: • Revitalized + expand sales organization: Industry focused Account
Executives. • Revamped Account Management Team – with sales experience + focus. • Expanding partner network worldwide. • Market is strong, creating robust pipeline opportunities. • Bookings Growth:
– 2.5X year-over-year increases in organic Contract Lifecycle Management bookings growth,
– Almost 4.5X year-over-year total bookings growth increases, including sales of sourcing solutions.
• Over 35 new top-tier brands to our customer roster in the past fiscal year.
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*CONFIDENTIAL*
240+ Enterprise Clients
Up-sell + cross-sell to current blue chip client base:
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*CONFIDENTIAL*
The b-pack Opportunity: • Company Overview:
– Founded in 2000 – Self funded w/ no outside
investors – Global footprint (Europe + US) – “Procure to Pay” Specialist – Gartner MQ P2P Visionary
• Financial overview: – ~$5.0M Annual Revenue – 22% YoY revenue growth – 42% SaaS revenue growth – EBITDA profitable
• Deal specifics: – Total Price $12.5M – 90% stock deal – ~2.5x multiple, very reasonable in
SaaS space
• Deal expect to close in early Q2 FY ‘16
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*CONFIDENTIAL*
b-pack is a Gartner MQ Visionary in Indirect P2P in 2015
ü All modules are available as SaaS.
ü Strong out-of-the-box P2P functionality for projects and grants.
ü Highly configurable workflow + platform.
ü Strong project management services + ongoing technical support.
ü Overall Gartner references extremely positive.
ü Global expansion: North America + Western Europe; new clients signed in Russia and Singapore.
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*CONFIDENTIAL*
Sampling of b-pack global clients: Retail, Insurance, Manufacturing, Energy
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*CONFIDENTIAL*
SELECTICA SUMMARY FINANCIALS
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*CONFIDENTIAL*
Non-GAAP Revenue Trend:
$3,541 $3,762
$6,167 $6,316 $6,085
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
Q4/FY2014 Q1/FY2015 Q2/FY2015 Q3/FY2015 Q4/FY2015
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*CONFIDENTIAL*
Deferred Revenue Trend:
$5,749 $4,989
$6,909
$8,134 $8,432
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
Q4/FY2014 Q1/FY2015 Q2/FY2015 Q3/FY2015 Q4/FY2015
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*CONFIDENTIAL*
Billings Trend:
$3,199 $3,002
$7,123 $7,209
$6,227
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
Q4/FY2014 Q1/FY2015 Q2/FY2015 Q3/FY2015 Q4/FY2015
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*CONFIDENTIAL*
Non-GAAP Gross Profit Trend:
-‐27%
40%
47% 57%
39%
-‐40%
-‐30%
-‐20%
-‐10%
0%
10%
20%
30%
40%
50%
60%
70%
-‐$1,500
-‐$1,000
-‐$500
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
Q4/FY2014 Q1/FY2015 Q2/FY2015 Q3/FY2015 Q4/FY2015
Non-‐GAAP gross profit $ Non-‐GAAP gross profit %
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*CONFIDENTIAL*
Non-GAAP Earnings Trend:
-‐$0.66
-‐$0.44
-‐$0.41
-‐$0.32
-‐$0.22
-‐$0.70
-‐$0.60
-‐$0.50
-‐$0.40
-‐$0.30
-‐$0.20
-‐$0.10
$0.00 Q4/FY2014 Q1/FY2015 Q2/FY2015 Q3/FY2015 Q4/FY2015
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*CONFIDENTIAL*
Summary Balance sheet: 3.31.15 Cash and equivalents 13,178 Credit facility 7,447
Accounts receivable 5,203 Accounts payable 1,535
Prepaid assets 1,681 Accrued liabiliAes 2,787
Total current assets 20,062 Deferred revenue 8,410
Total current liabiliAes 20,179
Property & equipment, net 290 Long term deferred revenue 22
Capitalized sopware 2,258 ConverAble note, net of discount 2,900
Goodwill 7,702 Other long term liabiliAes 167
Intangibles, net 6,453
Other assets 521
Total assets 37,286 Total liabiliAes & stockholder’s equity
37,286
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*CONFIDENTIAL*
Market compares
Medium-growth, enterprise SaaS company valuations:
Company Solution
Qtrly/Rev/Growth/(Yr/Yr)
Operating/Margin/(TTM) EV/Rev
Callidus Sales*performance*management*software 26% 87% 5.0Cvent Meeting*management*software 28% 0% 6.8Ultimate*Software HR*management*software 21% 11% 10.0Demandware eCommerce*platform 41% 816% 12.4Paycom*Software Payroll*and*HR*software 45% 10% 11.2SPS*Commerce Supply*chain*management*software 28% 4% 7.0LogMeIn Remote*desktop*software 33% 4% 6.0
Average 32% 1% 8.3
Selectica CLM/and/supply/management/software 52% M81% 2.5
Company Solution
Qtrly/Rev/Growth/(Yr/Yr)
Operating/Margin/(TTM) EV/Rev
Callidus Sales*performance*management*software 26% 87% 5.0Cvent Meeting*management*software 28% 0% 6.8Ultimate*Software HR*management*software 21% 11% 10.0Demandware eCommerce*platform 41% 816% 12.4Paycom*Software Payroll*and*HR*software 45% 10% 11.2SPS*Commerce Supply*chain*management*software 28% 4% 7.0LogMeIn Remote*desktop*software 33% 4% 6.0
Average 32% 1% 8.3
Selectica CLM/and/supply/management/software 52% M81% 2.5
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*CONFIDENTIAL*
Business Strategy Execution on Track: • Strategic ExecuAon on track
• CompleAng the b-‐pack transacAon in the near term • Sales team, revived and producing • Paving a road to profitability
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*CONFIDENTIAL*
*CONFIDENTIAL*
THANK YOU
