Investor Presentation - Diligent Board Member Services, Inc

Transcription

Investor Presentation - Diligent Board Member Services, Inc
Investor Presentation
April 20, 2015
Forward Looking Statements
In addition to historical information, this presentation may contain “forward-looking statements.”
The words “forecast,” “estimate,” “project,” “intend,” “expect,” “should,” “believe” and similar
expressions are intended to identify forward-looking statements. These forward-looking
statements involve known and unknown risks, uncertainties, assumptions and other factors that
may cause our actual results, performance or achievements to be materially different from any
future results, performance or achievements expressed or implied by such forward-looking
statements.
We refer you to our “Risk Factors” disclosure filed on Form 10-K filed with the Securities and
Exchange Commission on March16, 2015 for an extended discussion of the risks confronting our
business. The forward-looking statements in this presentation should be considered in the
context of these risk factors. The Company makes no commitment to revise or update any
forward-looking statements in order to reflect events or circumstances after the date any such
statements is made, except as otherwise required by the U.S. federal securities laws or the
NZSX Listing Rules.
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Today’s Presenters
Brian Stafford
Greg Petersen
CEO
Executive Vice Chairman
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Diligent at a Glance
3,000+ Clients & 92,700+ Users
~$89M Revenue Run-Rate(1)
Clients in 50 Countries, Product in 5 Languages
SaaS Provider of Secure
Growing list of Customer Service Awards
Communication and Collaboration
Tools for Board Members and
Best-in-Class Customer Retention
Company Executives
Preparing to Launch Company’s
Second Major Product
(1)
Based on Q4 2014 Revenue of $22.2 million.
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Company History
92,700 Users
72,600 Users
2010
Launched iPad App
2007
IPO on
NZX
2006
2001
Started Development
of Diligent Boardbooks
2007
2012
Opened Australia
Office
8,200 Users
4,000 Users
2001
27,500 Users
2008
2007
Opened UK Office
2009
2010
2014
Launched Microsoft
Surface Application
5
2011
2012
2014
Launched Product in
New Languages
2014
Opened R&D Center
in Charlotte
2013
2014
2015
Anticipated Launch of
Diligent Teams
Product Overview
The World’s Most Widely Used Board Communication & Collaboration Tool
Seamlessly facilitates confidential document sharing & review
Fast, intuitive, feature-rich user experience
World-class security and hosting infrastructure
Accessible from a variety of devices from any location, at
anytime, online or offline
Award-winning 24/7 customer support
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Investment Highlights






Clear Leader in Large Market with Greenfield Opportunities Remaining
Scale Creates Network Referral and Investment Capacity Advantages
Highly Loyal Blue-Chip Customer Base
Demand For New Product in Growing, Global Market
Multiple Growth Vectors With New and Existing Customers & Markets
Strong Financial Profile Characterized By 28% YOY Growth and 30% Adj. EBITDA Margins in
2014
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Clear Leader in Large Market with Greenfield Opportunities Remaining
 85% of sales to new clients are greenfield
 119,000 potential clients worldwide, indicating $3.57B in opportunity
24,000
119,000
EMEA(4)
APAC(5)
Total Market
54,000
5,000 Publicly-Traded U.S. Companies:
Paper / Other: ~50 – 65%
30,000
6,000
Competitor Customers: ~17% – 32%
Diligent Customers: 18%
5,000
Publicly-Traded U.S. Co.’s(1)
Other U.S. Institutions(2)
Rest of Americas(3)
Number of
Potential Clients
5,000
30,000
6,000
54,000
24,000
119,000
Potential Rev.
$150M
$900M
$180M
$1,620M
$720M
$3,570M
(1)
(2)
(3)
(4)
(5)
US Publicly-traded companies – no revenue minimum
Includes all U.S. private entities over $100mm in revenue, higher education and state organizations.
Includes public and private entities with revenue over $100mm in Canada, Mexico and Brazil.
Includes public and private entities with revenue over $100mm in UK, South Africa, Germany, Switzerland, France, Spain, Italy, Belgium, Netherlands, Luxembourg, Norway, Sweden, Finland, Denmark.
Includes public and private entities with revenue over $100mm in Australia New Zealand, Singapore, Japan, Taiwan, Hong Kong, India and Malaysia.
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Scale Creates Network Referral and Investment Capacity
Advantages
 Diligent users are likely to serve on multiple boards,
creating a multiplier effect for referral sales
 Extremely satisfied customers make it easier to close
on referral sales
 Diligent has the capacity to invest more in customer
support & product development than smaller players
Estimated Number of Users
(Thousands)
93
40
Boardvantage
40
Nasdaq
OMX
Directors Desk
15
15
15
BoardPad
Computershare
BoardWorks
Thomson
Reuters
Accelus BoardLink
Source: Publicly available information and company estimates.
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Highly Loyal Blue-Chip Customer Base
Representative Customers
 33% of Fortune 500
 18% of U.S. Public Companies
 38% of FTSE 100
 95%+ retention rates
 Driving expansion into broader
collaboration space
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Demand For New Product in Growing Market
Market Opportunity Outside Boards of Directors
 Existing Boardbooks clients have already begun to
find new use cases for the product
($ Billions)
 New Diligent Teams offering designed for a broad
set of use cases
 ~$18 – $25B market opportunity in next five years(1)
$18.1
$19.6
$21.1
2014
2015
2016
Source: IDC.
$22.8
$24.6
2017
2018
Bank Loan File Review
Job Candidate Resume Review
Doctor / Patient Reviews
Executive Team Planning
Parole Board
Asset Management Sales
(1)
Reflects content management, collaboration, and project and portfolio management
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Growth Opportunities
Expand Footprint Globally & Within Key Industries
 Identified 5 key industries that represent a $50M+ opportunity to win new clients and achieve greater penetration in the U.S.
market
 Investments made in European and Latin American sales forces
 Investments underway in the Asia Pacific region outside of Australia / New Zealand
Upsell within Existing Client Base
 Initial sale generally for specific Board and Director use
Cohort Analysis of Contract Value: New EMEA Clients Signed in 1Q12
 Following on from initial contract, satisfied clients upgrade their
use to include further Boards, Committees and additional use
cases outside of the boardroom
 Specific case study showing the increase in contract value over
time for a group of clients that initially signed in EMEA in Q1
2012
£25,025
£33,883
£17,790
Initial Contract Value Q1
2012
December 2012
December 2013
December 2014
Reflects average contractual revenue obligation across cohort of 28 clients.
Note: During the period shown, two clients from the cohort were lost – one as a result of M&A and the other due to a regulatory requirement.
Expand Product Portfolio
 Clients have asked for more – thousands of users utilize Boardbooks outside the boardroom
 Diligent Teams will offer additional tools for collaboration in a growing, global market
 Small, strategic acquisitions intended to provide growth opportunities and improved product portfolio
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£30,903
Financial Highlights
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Financial Highlights
Proven Revenue Growth
 Continued revenue growth driven by new
customer acquisition and upsell activity
$83.1
$64.8
 Highly profitable operations from core products
enable funding of growth initiatives
– Expanded sales efforts
– New product development
$39.1
$15.6
2011
2013
2014
Adjusted EBITDA Margin
Users / Client
26.8
2012
28.8
29.6
34.6%
30.7
26.7%
29.6%
(0.0%)
2011
2012
2013
2014
2011
14
2012
2013
2014
Benchmarking Supports Growth Initiatives
Best-in-Class Gross Margin
Room to Grow through Investment
R&D % of Revenue
79%
78%
76%
70%
68%
66%
30%
63%
11%
Diligent
Box
Salesforce
Xero
Netsuite Workday
Diligent
Veeva
15%
13%
33%
37%
18%
Veeva Salesforce Netsuite
Box
Xero
Workday
Efficient Return on Sales & Marketing Spend Versus Comparable SaaS Vendors
Revenue Payback (years)
Gross Profit Payback (years)
0.7
0.9
Diligent
1.4
1.0
Xero
4.6
4.0
1.1
1.4
Veeva
1.9
1.3
Netsuite
2.7
1.8
Workday
2.9
2.5
Box
Source: Most recent public quarterly SEC filings for U.S. reporting companies; Xero based on most recent interim report (revenue payback provided in interim reports adjusted by gross margin for Gross Profit Payback).
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Salesforce
Q1 and Fiscal Year 2015 Outlook
Guidance Provided on March 1, 2015
2015 Investment Initiatives
($ Millions)
Revenue
FY 2014
Q1 2015
FY 2015
 Increase salespeople from
23 to 33 globally
$83.1
$22.5 – $22.7
$97 – $99
 Marketing investment to
support sales initiatives
YoY Increase
28%
18% – 19%
17% – 19%
 Increase R&D headcount
from 92 to 118 globally
Adj. EBITDA Margin
30%
NP
24% – 26%
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Financial Highlights
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

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Strong Revenue Growth
Best-in-Class Gross Margin
Significant Growth Potential with Increased R&D and S&M Investment
Return on Investment Realized Much Faster than Comparable SaaS Vendors
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Questions?
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Appendix
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Non-GAAP Financial Measures
This investor presentation presents Adjusted EBITDA, which is provided to investors to supplement the results of operations reported in
accordance with accounting principles generally accepted in the United States of America (“GAAP”). We define this term as follows:
•
Adjusted EBITDA: operating income before depreciation and amortization expense, stock based compensation expense, costs associated
with the investigation and restatement of our historical financial statements, and non-recurring costs related to the CEO’s performance cash
awards and restatement bonuses.
This supplemental measure of the Company’s performance is not required by, or presented in accordance with GAAP. The Company’s
management uses non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a
supplement to the corresponding GAAP measures, in evaluating the Company’s ongoing operational performance and trends and in comparing its
financial measures with other companies in the same industry, many of which present similar non-GAAP financial measures to help investors
understand the operational performance of their businesses. However, it is important to note that the particular items the Company excludes from,
or includes in, its non-GAAP financial measures may differ from the items excluded from, or included in, similar non-GAAP financial measures
used by other companies in the same industry. Non-GAAP financial measures should not be considered in isolation from, or a substitute for,
financial information prepared in accordance with GAAP. For a quantitative reconciliation of Adjusted EBITDA to the most directly comparable
GAAP financial performance measure see Appendix 1: Reconciliation of EBITDA to Adjusted EBITDA.
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Appendix 1: Reconciliation of EBITDA to Adjusted EBITDA
($ Millions)
Q4 2014
Operating Income
Q4 2013
FY 2011
FY 2012
FY 2013
FY 2014
$3,356
$1,028
($1,489)
$7,616
$10,331
$15,124
831
515
579
1,187
1,645
2,784
$4,187
$1,543
($910)
$8,803
$11,976
$17,908
Investigations & Restatement
0
2,289
0
263
5,571
916
CEO Performance Cash Awards
& Restatement Bonuses
0
1,253
0
0
2,227
2,756
1,265
1,356
908
1,384
2,581
3,033
Adjusted EBITDA
$5,452
$6,441
($2)
$10,450
$22,405
$24,613
Adjusted EBITDA Margin
24.6%
35.4%
NM
26.7%
34.6%
29.6%
Depreciation & Amortization
EBITDA
Stock Based Compensation
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