Webcast Slides

The 2015 Actua Investor Conference –
Driving Growth in Vertical SaaS
October 7, 2015
© 2015 Actua Corporation / All Rights Reserved / 1
Forward-Looking Statements
The statements contained in this presentation that are not historical facts are forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve certain
risks and uncertainties, including, but not limited to, risks associated with our ability to compete successfully in
highly-competitive rapidly-developing markets, the effect of economic conditions generally, capital spending by our
customers, our ability to retain existing customer relationships and secure new ones, developments in the markets
in which we operate and our ability to respond to those changes in a timely and effective manner, the availability,
performance and security of our cloud-based technology, particularly in light of increased cybersecurity risks and
concerns, our ability to retain key personnel, our ability to deploy capital effectively and on acceptable terms, our
ability to successfully integrate any acquired business, the impact of any potential acquisitions, dispositions or other
strategic transactions, our ability to have continued access to capital and to manage capital resources effectively,
and other risks and uncertainties detailed in Actua's filings with the U.S. Securities and Exchange Commission.
Those and other factors may cause actual results to differ materially from those projected.
© 2015 Actua Corporation / All Rights Reserved / 2
Non-GAAP Financial Measures
Non-GAAP net income (loss), non-GAAP net income (loss) per diluted share, adjusted EBITDA, adjusted cost of revenue, adjusted sales
and marketing, adjusted general and administrative and adjusted research and development are non-GAAP financial measures and have
no standardized measurement prescribed by GAAP. When referring to non-GAAP financial measures, the term “adjusted” is used
interchangeably with the term “non-GAAP” by Actua’s management, and the two have identical definitions. Non-GAAP net income (loss) is
GAAP net income (loss) attributable to Actua, including acquired businesses’ deferred revenue and excluding share-based compensation,
amortization of intangibles, impairment-related and other costs, transaction expenses, other (income) loss, net, equity loss, current noncash income tax benefit on discrete item and loss (income) from discontinued operations. Non-GAAP net income (loss) per diluted share is
non-GAAP net income (loss) divided by (1) GAAP shares, including the any impact of incremental dilutive securities (in the case of income)
or (2) GAAP shares, excluding any impact of incremental dilutive securities (in the case of loss). Adjusted EBITDA is GAAP net income
(loss) attributable to Actua, including acquired businesses’ deferred revenue and excluding share-based compensation, amortization of
intangibles, impairment-related and other costs, transaction expenses, other (income) loss, net, equity loss, current non-cash income tax
benefit on discrete item, loss (income) from discontinued operations, interest expense (income), net, current, cash income tax expense and
depreciation expense. Adjusted cost of revenue is cost of revenue operating expenses, excluding share-based compensation. Adjusted
sales and marketing is sales and marketing operating expenses, excluding share-based compensation. Adjusted general and
administrative is general and administrative operating expenses, excluding share-based compensation. Adjusted research and
development is research and development operating expenses, excluding share-based compensation. Actua's consolidated businesses
are BOLT, FolioDynamix, GovDelivery and MSDSonline (now VelocityEHS) as of June 30, 2015. Please note the following:
•
FolioDynamix became a consolidated business on November 3, 2014 and, therefore, has been included in Actua’s consolidated
results beginning on November 1, 2014. The results of FolioDynamix for the first two days of November 2014 are insignificant for
consolidation purposes.
•
Channel Intelligence, Investor Force and Procurian were sold in Q1, Q1 and Q4 2013, respectively, and are presented as
discontinued operations under GAAP.
Actua's management believes these non-GAAP financial measures provide useful information to investors and potential investors that
enables them to view Actua’s business in a similar manner as Actua's management and provide meaningful supplemental information
regarding Actua’s operating results as they exclude amounts that Actua excludes as part of its monitoring of operating results and
assessment of the performance of its business.
© 2015 Actua Corporation / All Rights Reserved / 3
Overview
BRINGING THE POWER OF THE CLOUD
TO INDUSTRY-SPECIFIC VERTICAL MARKETS
• Deep industry solutions with significant leverage
• More capital efficient
• Attractive competitive moats
• Few new market entrants
• Sticky customer relationships
© 2015 Actua Corporation / All Rights Reserved / 4
Overview
• Operate cloud software solutions in four sectors:
– Government Communications
– Environmental Health and Safety
– Wealth Management
– Property and Casualty Insurance
• Each vertical represents a multi-billion dollar market opportunity
• Each market is early in cloud adoption (less than 10% penetrated)
• Each business is a leader or emerging leader in its market
© 2015 Actua Corporation / All Rights Reserved / 5
Actua Platform Advantage: The Intersection of Vertical IP and SaaS IP
Being part of the Actua Platform fuels
growth and drives operating leverage:
SaaS IP
Vertical IP
• Public company advantage –
strong balance sheet provides
solid foundation and stability
• Accelerate market share and
customer adoption
• Drive faster innovation (especially
in user interface and mobile)
• Over 800 vertical SaaS
professionals with deep domain
knowledge
• Core team with deep expertise in
building software companies
• Strong track record of attracting,
growing and retaining talent
© 2015 Actua Corporation / All Rights Reserved / 6
Long-Term Target Model
Q2 2015
Long-Term
Target
2013
2014
Gross Margin
71%
72%
71%
75%
Sales and Marketing
46%
45%
35%
25% - 30%
General and Administrative
41%
32%
27%
10% - 12%
Research and Development
15%
17%
21%
12% - 16%
(17%)
(9%)
(4%)
20% - 30%
Adjusted EBITDA
%s determined excluding stock-based compensation and deferred revenue adjustments from purchase accounting
© 2015 Actua Corporation / All Rights Reserved / 7
Long-Term Target Model
• 5 year model
• Assumes 15-20% organic revenue growth in the out years
• Expect to see slow, steady improvement on the gross margin line to
75% (on an annual basis)
• Expect to see continued leverage in R&D and G&A (R&D uptick in
2015 and 2016 as we invest in platforms)
• Sales and marketing investment levels will be predicated on the return
we can realize (difficult to predict timing; but expect it to decrease
over time to 25-30%)
• Accretive tuck-ins are an important part of the strategy to help drive
growth and leverage
• 2016 – Exiting investment mode; entering profitable growth
mode
© 2015 Actua Corporation / All Rights Reserved / 8
Revenue Growth
• 87% Recurring Revenue Rate
• 97%+ Retention Rate
2015 Guidance
Range:
$133.0M - $138.0M
Figures shown in millions
$140.0
$110.0
$84.8
$80.0
$59.2
$50.0
$20.0
2013 Actual
2014 Actual
2015 Guidance
© 2015 Actua Corporation / All Rights Reserved / 9
Cash Flow From Operations
$0.0
Figures shown in millions
($5.0)
2015 Guidance Range:
$(5.0)M - $(9.0)M
($10.0)
$(14.2)
($15.0)
$(18.0)
($20.0)
2013 Actual
2014 Actual
2015 Guidance
© 2015 Actua Corporation / All Rights Reserved / 10
Cash Flow
• Demonstrating healthy operating leverage in 2015
• 2016: Profitable growth mode
• Expect to see the year-over-year trend of improving cash flow to
continue in 2016
• FolioDynamix, GovDelivery and VelocityEHS are expected to
generate an aggregate of $12 - $16 million in 2015; highlights the
leverage of these vertical platforms
© 2015 Actua Corporation / All Rights Reserved / 11
Today’s Theme: Driving Growth in Vertical SaaS
Key Growth Drivers for Actua Companies:
– Sales and Marketing
– Product / Technology Development
– Mergers and Acquisitions
– Macro Trends
© 2015 Actua Corporation / All Rights Reserved / 12
Where We Are Today
• As we look forward to 2016, we are committed to driving revenue
growth while realizing operating leverage
– Expect to see accelerating organic revenue growth (20-25%) and
positive cash flow in 2016
– Aggressive 2015 investments in sales and marketing and R&D are
resulting in strong bookings
– Accretive tuck-in acquisitions such as KMI, NuCivic and Textizen are
allowing us to efficiently cross-sell to the same customer base, access
new customers (thereby expanding the overall TAM) and increase ACV
• Focused on continued execution to achieve the goals presented in
our long-term model
© 2015 Actua Corporation / All Rights Reserved / 13
Appendix
© 2015 Actua Corporation / All Rights Reserved / 14
Bolt: Transforming Insurance
Back-end
Front-end
Broaden
Broaden
Distribution
Customer Relationships
Leverage new distribution channels with the
Bolt Platform to reach more customers
Always say ‘yes’ to customers and meet all
their needs with the Bolt Platform
Maximize
Revenue and
CLV
Flood
Homeowners
Homeowners
Missed
Rev.
Pet
Auto
Auto
Renters

Increase
Customer
Retention
360 Degree
View of
customer
Products represented
as share of wallet
• Broader distribution brings Insurers new customers they otherwise wouldn’t see
• Broader customer relationships drive up customer/agent satisfaction, retention and
customer lifetime value (CLV)
© 2015 Actua Corporation / All Rights Reserved / 15
Actua’s Platforms
Provides a multi-channel, multi-carrier software
platform that enables insurance distributors to retain
and grow revenue through a comprehensive insurance
solution
Important metrics:*
•
•
•
•
•
•
•
•
•
Annual Revenue Growth: 27% in Q2 2015 compared to Q2 2014
New Signings: Signed a third top 10 carrier platform customer, which will
launch in Q4 and begin generating revenue in Q1 2016; also saw continued
roll-out and broader utilization of the platform with all three of our largest
customers
Total Customers: Insurance carriers (67, of which six are carrier
distribution partners), independent agents (2,100), alternative distribution
partners (4)
Pipeline: Entered the quarter with nine large mid-to-late stage deals, signed
one during the quarter and added three new opportunities, bringing the total
to 11; all prior opportunities referenced in the pipeline remain, with some in
the final contract stages
TAM: Multi-billion $$
Added an additional $100 million of premiums on the platform, bringing the
total premiums to $1.1 billion at quarter-end
Competitive Moat: Platform is integrated into 67 of the largest insurance
carriers and has over 3,500 carrier connections which creates the largest
source of insurance flow for direct carriers, agents, agencies and alternative
insurance distributors
Operating cash flow negative for 2015
Multi-year/multi-million dollar contracts
* As of 6/30/15 unless otherwise noted
© 2015 Actua Corporation / All Rights Reserved / 16
GovDelivery: Government Communication & Engagement
Empowering government to create better lives for more people. More than 1,000 organizations
worldwide use the GovDelivery platform and network to inform and engage over 90 million
people.
90+ Million Citizen
Network
Communicate
-Networks
-Overlays
-Signups
Teach
Internal and
External Training
To Drive:
•
•
•
Promotion and
Transformation of
Services
Enhanced public
awareness
Improved citizen
involvement
Share
Information
(Open Civic)
Workflow,
Collaboration and
Data Apps
© 2015 Actua Corporation / All Rights Reserved / 17
Actua’s Platforms
**
Digital communications and marketing platform that enables
public sector organizations to effectively reach citizens and
drive action
Important metrics:*
•
•
•
•
•
•
•
•
Annual Revenue Growth: 24% in Q2 2015 compared to Q2 2014
New Signings: Closed 48 deals in Q2 2015, reporting strongest Q2
ever in terms of number of deals closed; new signings included a
large state lottery program, two state enterprise contracts and a
number of strategic federal agencies
Total Customers: Serving 1,000+ federal, state, local and UK
government agencies reaching over 90 million citizen subscribers
Pipeline: 38% pipeline growth since Q1 2015, including 17 federal
program opportunities; up 30% overall in terms of dollar value
TAM: > $1 billion
Competitive Moat: Subscriber base creates network effect,
significantly expanding reach and audience for each customer
Operating cash flow positive for 2015
Annual subscription revenue model
* As of 6/30/15 unless otherwise noted
© 2015 Actua Corporation / All Rights Reserved / 18
FolioDynamix: End-to-End Wealth Management
A unified end-to-end wealth management solution that enables
advisors to drive growth and differentiation
© 2015 Actua Corporation / All Rights Reserved / 19
Actua’s Platforms
Enables the delivery of client-centric, innovative, scalable,
wealth management solutions through secure, cloud-based,
fully integrated, advisory products and solutions
Important Metrics:*
• Annual Revenue Growth: 19% in Q2 2015 compared to Q2 2014
• New Signings: Signed seven new customers in Q2, three of which are large
seven-figure deals, and four of which are mid-to-large sized, six-figure contracts
• Total Customers: More than 200 banks, brokerage firms and large RIAs
• Pipeline: Continues to build well ahead of sales growth, in terms of quantity
and velocity through pipeline; seeing strong interest from banking, broker
dealer and RIA markets
• TAM: Multi-billion $$
• Competitive Moat: Comprehensive, client-centric technology platform with
integrated proprietary advisory products
• Operating cash flow positive for 2015
• Multi-year/multi-million dollar contracts
• More than 97,000 advisors and users
• $4.3 billion in regulatory assets under management
*As of 6/30/15 unless otherwise noted
© 2015 Actua Corporation / All Rights Reserved / 20
VelocityEHS: Automating the Desktop of the Safety Manager
External
SDS/Chemical Mgmt.
Significant
Consequences:
Pressures:
Incident Mgmt.
& Reporting
Audit & Inspections
Complexity &
Reporting
Corporate Responsibility
Regulatory Pressure
Training
Compliance Mgmt.
& Education
Mgmt. of Change
Costly Fines
(5-figure/day)
Law Suits and Litigation
Corporate Reputation
Risk Analysis
Green House Gas
Sustainability Metrics
& Reporting
© 2015 Actua Corporation / All Rights Reserved / 21
Actua’s Platforms
Environmental, Health and Safety compliance platform
that enables organizations to meet stringent and costly
OSHA requirements
Important Metrics:*
•
•
•
•
•
•
•
•
Annual Revenue Growth: 42% in Q2 2015 compared to Q2 2014
New Signings: Added 647 new customers in Q2 2015
Total Customers: Close to 11,000 companies; protecting more than
8 million employees in U.S. and Canada
Pipeline: Growth is slightly ahead of revenue growth and is skewed
towards large platform customers (customers with access to the full
platform of products)
TAM: > $3 billion
Competitive Moat: Database of over 8 million material safety data
sheets is the only comprehensive web-based library that ensures
100% compliance for companies and continues to expand as new
customers come onto the platform
Operating cash flow positive for 2015
3-year subscription revenue model
* As of 6/30/15 unless otherwise noted
Note: MSDSonline rebranded to VelocityEHS in September 2015
© 2015 Actua Corporation / All Rights Reserved / 22
Actua Investor Conference
Q&A
© 2015 Actua Corporation / All Rights Reserved / 23
• ACTUA LOGO
© 2015 Actua Corporation / All Rights Reserved / 24
The 2015 Actua Investor Conference –
Driving Growth in Vertical SaaS
October 7, 2015
© 2015 Actua Corporation / All Rights Reserved / 25

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