EX-99.2 3 q12013earningsslidedeckf.htm EXHIBIT 99.2 INVESTOR PRESENTATION "Q1 2013 EARNINGS SLIDE DECK" q12013earningsslidedeckf
Reinventing Marketing for the Mobile Era 1 Reinventing Marketing for the Mobile Era Velti 1st Quarter 2013 Earnings Report M A Y 1 3 t h , 2 0 1 3


 
Reinventing Marketing for the Mobile Era 2 This presentation contains forward-looking information about the Company’s business and financial outlook, including statements regarding financial guidance for the second quarter and fiscal year 2013, as well as regarding the financial impact of our recent restructuring, and our divestment of assets at the end of 2012. The achievement or success of the matters covered by such forward- looking statements involve risks and uncertainties that could cause our results to differ materially from these forward looking statements, including - but not limited to – risks related to achieving the benefits of our acquisitions, our ability to manage our cash, reduce DSOs and operating expenses, add new and expand existing customer relationships, and expand into new markets and verticals. Safe Harbor Statement WWW.VELTI.COM


 
Reinventing Marketing for the Mobile Era 3 Contents  GAAP Revenue, Margin  Restructuring Impact  Revenue Breakdown by Geography  GAAP, Adjusted EBITDA & Adjusted Net Income reconciliation  Comprehensive Receivables  Q2 2013 and FY 2013 Guidance


 
Reinventing Marketing for the Mobile Era 4 Q1 2013 Revenue and Mix – GAAP $40.6 $30.9 $11.2 $10.1 $0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 Q1 2012 Q1 2013 Revenue Mix - GAAP Q1 2012 vs. Q1 2013 ($ millions) Marketing Advertising 22% 78% 75% 25% $51.8 $41.0 Q1 2012 results include revenue from our divested and rationalized operations.


 
Reinventing Marketing for the Mobile Era 5 Q1 2013 Revenue Less 3rd Party Costs Mix – GAAP Basis Revenue less 3rd Party Costs for Advertising business +25% Advertising margins improved from 23% to 30% $32.5 $14.6 $2.5 $3.1 $0.0 $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 $40.0 Q1 2012 Q1 2013 Revenue Less 3rd Party Costs Mix Q1 2012 vs. Q1 2013 ($ millions) Marketing Advertising 7% 17% 93% 83% $35.0 $17.6


 
Reinventing Marketing for the Mobile Era 6 Impact of Restructuring $- $20.0 $40.0 $60.0 Q1 13 act Q4 13 est OpEx ($ in millions) -26% 600 800 1,000 1,200 1/1/2013 Today Headcount $- $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 2012 2013 CapEx ($ in millions) -66% -22%


 
Reinventing Marketing for the Mobile Era 7 FY 2012 vs. Q1 2013 Geographic Breakdown of Revenue 12% 36% 29% 23% % Contribution to Revenue by Region Q1 2013 Other Europe Western Europe Americas Asia/Africa 65% 32% 32% 24% 13% % Contribution to Revenue by Region FY 2012 Other Europe Western Europe Americas Asia/Africa 56%


 
Reinventing Marketing for the Mobile Era 8 i ti r ti f r t il r Q1 2013 US GAAP to ADJUSTED EBITDA Reconciliation in (000's) GAAP Share-Based Comp Excluding Share- Based Comp Other Adjustments Adjusted EBITDA Software as a service (SaaS) revenue $ 32,390 $ - $ 32,390 $ - $ 32,390 License revenue 2,159 - 2,159 - 2,159 Managed Services 6,458 - 6,458 - 6,458 Total revenue 41,007 - 41,007 - 41,007 Costs and expenses: Third-party costs 23,365 - 23,365 - 23,365 Datacenter and direct project costs 5,552 (48) 5,504 - 5,504 General and administrative expenses 14,065 36 14,101 (415) 13,686 Sales and marketing expenses 12,591 (174) 12,417 - 12,417 Research and development expenses 4,497 (151) 4,346 - 4,346 Impairment of intangible assets 133,129 133,129 (133,129) - Depreciation and amortization 8,620 - 8,620 (2,462) 6,158 Total costs and expenses 201,819 (337) 201,482 (136,006) 65,476 Income (loss) from operations (160,812) 337 (160,475) 136,006 (24,469) Interest expense, net (438) - (438) - (438) Gain (loss) from foreign currency transactions (2,634) - (2,634) 2,634 - Other Expense (6) - (6) - (6) Income (loss) before income taxes, investment in associates and non-controlling interests (163,890) 337 (163,553) 138,640 (24,913) Income tax (expense) benefit 6,853 - 6,853 - 6,853 Net income (loss) (157,037) 337 (156,700) 138,640 (18,060) Net loss attributable to non-controlling interest (679) - (679) - (679) Net income (loss) attributable to Velti $ (156,358) $ 337 $ (156,021) $ 138,640 $ (17,381) Net income (loss) attributable to Velti per share: Basic and diluted (2.38) 0.01 (2.37) 2.11 (0.26) Weighted average number of shares outstanding: Basic and diluted 65,808 65,808 65,808 65,808 65,808 Adjusted EBITDA (152,192)$ 337$ (151,855)$ 133,544$ (18,311)$


 
Reinventing Marketing for the Mobile Era 9 i ti r ti f r t il r Consolidated Statement of Operations 3-Month Period Ended: 3-Month Period Ended: 3-Month Period March 31, 2011 June 30, 2011 Sept. 30, 2011 Dec. 31, 2011 FY 2011 March 31, 2012 June 30, 2012 Sept. 30, 2012 Dec. 31, 2012 FY 2012 March 31, 2013 Software as a service (SaaS) revenue $ 23,279 $ 27,550 $ 25,545 $ 62,650 $ 139,024 $ 46,768 $ 48,946 $ 48,540 $ 59,956 $ 204,210 $ 32,390 License revenue 2,791 4,077 10,091 19,746 36,705 1,505 2,898 5,229 12,581 22,213 2,159 Managed Services 3,480 2,731 2,552 4,710 13,473 3,520 6,847 8,624 24,930 43,921 6,458 Total revenue 29,550 34,358 38,188 87,106 189,202 51,793 58,691 62,393 97,467 270,344 41,007 Costs and expenses: Third-party costs 10,633 10,717 13,746 18,805 53,901 16,862 20,979 22,701 30,862 91,404 23,365 Datacenter and direct project costs (1) 2,951 5,140 4,127 5,734 17,952 7,892 7,585 6,894 7,595 29,966 5,552 General and administrative expenses (1) 9,468 14,409 10,260 11,121 45,258 15,132 16,140 15,516 21,408 68,196 14,065 Sales and marketing expenses (1) 7,993 11,586 7,785 10,369 37,733 12,753 12,520 13,193 16,041 54,507 12,591 Research and development expenses (1) 2,830 3,563 2,814 3,853 13,060 4,684 4,336 5,724 6,492 21,236 4,497 Acquisition related and other charges 1,461 6,142 - 2,787 10,390 2,197 2,131 5,622 - 9,950 - Impairment of intangible assets - - - 16,902 16,902 133,129 Loss from disposal of assets - - - - - - - 9,626 906 10,532 - Depreciation and amortization 3,754 4,108 5,788 7,250 20,900 7,269 8,022 8,707 9,948 33,946 8,620 Total costs and expenses 39,090 55,665 44,520 59,919 199,194 66,789 71,713 87,983 110,154 336,639 201,819 Income (loss) from operations (9,540) (21,307) (6,332) 27,187 (9,992) (14,996) (13,022) (25,590) (12,687) (66,295) (160,812) Interest expense, net (3,483) (1,398) (1,482) (1,026) (7,389) (743) (416) (257) (414) (1,830) (438) Gain (loss) from foreign currency transactions 378 (2,181) 8,777 (774) 6,200 1,375 (2,449) 3,210 (141) 1,995 (2,634) Other Expense (76) 162 (120) (15) (49) 6,174 (187) (34) (78) 5,875 (6) Income (loss) before income taxes, investment in associates and non-controlling interests (12,721) (24,724) 843 25,372 (11,230) (8,190) (16,074) (22,671) (13,320) (60,255) (163,890) Income tax (expense) benefit (2,237) (721) (482) (368) (3,808) (278) (862) (46) 8,832 7,646 6,853 Gain or (loss) from equity investments (965) 320 262 183 (200) (371) (785) (2,023) (576) (3,755) 0 Net income (loss) (15,923) (25,125) 623 25,187 (15,238) (8,839) (17,721) (24,740) (5,064) (56,364) (157,037) Net loss attributable to non-controlling interest (51) (49) 25 205 130 (21) (22) (23) 119 53 (679) Net income (loss) attributable to Velti $ (15,872) $ (25,076) $ 598 $ 24,982 $ (15,368) $ (8,818) $ (17,699) $ (24,717) $ (5,183) $ (56,417) $ (156,358) Net income (loss) attributable to Velti per share: Basic $ (0.34) $ (0.47) $ 0.01 $ 0.40 $ (0.28) $ (0.14) $ (0.28) $ (0.38) $ (0.08) $ (0.88) $ (2.38) Diluted $ (0.34) $ (0.47) $ 0.01 $ 0.40 $ (0.28) $ (0.14) $ (0.28) $ (0.38) $ (0.08) $ (0.88) $ (2.38) Weighted average number of shares outstanding: Basic 47,099 53,047 61,595 61,718 55,865 61,816 63,916 64,684 65,223 63,910 65,808 Diluted 47,099 53,047 63,926 62,921 55,865 61,816 63,916 64,684 65,223 63,910 65,808 (1) Includes share-based compensation as follows: Datacenter and direct project costs $ 628 $ 1,751 $ 601 $ 568 $ 3,548 $ 972 $ 778 $ 775 $ 1,196 $ 3,721 $ 48 General and administrative expenses 3,244 5,632 1,342 1,516 11,734 3,660 3,113 2,601 2,549 11,923 (36) Sales and marketing expenses 1,876 4,019 1,127 1,266 8,288 2,392 2,117 1,925 2,811 9,245 174 Research and development expenses 814 1,889 703 650 4,056 1,584 1,336 1,277 2,110 6,307 151 Total Share-based compensation $ 6,562 $ 13,291 $ 3,773 $ 4,000 $ 27,626 $ 8,608 $ 7,344 $ 6,578 $ 8,666 $ 31,196 $ 337


 
Reinventing Marketing for the Mobile Era 10 i ti r ti f r t il r Consolidated Statement of Operations 3-Month Period Ended: 3-Month Period Ended: 3-Month Period March 31, 2011 June 30, 2011 Sept. 30, 2011 Dec. 31, 2011 FY 2011 March 31, 2012 June 30, 2012 Sept. 30, 2012 Dec. 31, 2012 FY 2012 March 31, 2013 Adjusted Net Income (Loss) & Adjusted EBITDA Reconcilation Net loss before non-controlling interest $ (15,923) $ (25,125) $ 623 $ 25,187 $ (15,238) $ (8,839) $ (17,721) $ (24,740) $ (5,064) $ (56,364) $ (157,037) Adjustments: Foreign exchange (gains) losses (378) 2,181 (8,777) 774 (6,200) (1,375) 2,449 (3,210) 141 (1,995) 2,634 Non-cash share based compensation 6,562 13,291 3,773 4,000 27,626 8,608 7,344 6,578 8,666 31,196 337 Non-recurring and acquisition-related expenses 2,282 6,995 2,404 3,141 14,822 (2,301) 3,833 7,384 1,400 10,316 415 Impairment of intangible assets 1,500 1,500 16,902 16,902 133,129 (Gain) Loss from equity method investments 1,458 (169) 109 490 1,888 133 569 (151) 45 596 - Loss from disposal of assets - 9,626 906 10,532 Depreciation and amortization - acquisition related 795 797 795 2,220 4,607 2,637 2,587 2,717 3,031 10,972 2,462 Adjusted net income (loss) $ (5,204) $ (2,030) $ (1,073) $ 37,312 $ 29,005 $ (1,137) $ (939) $ (1,796) $ 26,027 $ 22,155 $ (18,060) (Gain) loss from equity method investments - other (493) (151) (371) (673) (1,688) 238 216 2,174 531 3,159 - Depreciation and amortization - other 2,959 3,311 4,993 5,030 16,293 4,632 5,435 5,990 6,917 22,974 6,158 Income tax expense (benefit) 2,237 721 482 368 3,808 278 862 46 (8,832) (7,646) (6,853) Interest expense, net 1,704 1,398 1,482 1,026 5,610 743 416 257 414 1,830 438 Other (income) expense 76 (162) 120 15 49 (146) 187 34 77 152 6 Adjusted EBITDA $ 1,279 $ 3,087 $ 5,633 $ 43,078 $ 53,077 $ 4,608 $ 6,177 $ 6,705 $ 25,134 $ 42,624 $ (18,311) Summary Data Total Revenue 29,550 34,358 38,188 87,106 189,202 51,793 58,691 62,393 97,467 270,344 41,007 Third-party costs 10,633 10,717 13,746 18,805 53,901 16,862 20,979 22,701 30,862 91,404 23,365 Total revenue less: third party costs 18,917 23,641 24,442 68,301 135,301 34,931 37,712 39,692 66,605 178,940 17,642 % Margin 64% 69% 64% 78% 72% 67% 64% 64% 68% 66% 43% Pro Forma Operating Expenses Datacenter and direct project costs 2,390 3,389 3,526 5,166 14,471 6,820 6,707 6,019 6,299 25,845 5,504 General and administrative expenses 6,617 7,924 6,514 8,178 29,233 10,397 11,780 11,608 18,214 51,999 13,686 Sales and marketing expenses 6,462 7,567 6,658 8,847 29,534 10,166 10,208 11,073 12,735 44,182 12,417 Research and development expenses 2,169 1,674 2,111 3,032 8,986 2,940 2,840 4,287 4,222 14,289 4,346 Total 17,638$ 20,554$ 18,809$ 25,223$ 82,224$ 30,323$ 31,535$ 32,987$ 41,470$ 136,315$ 35,953$ Adjusted EBITDA Margin 4% 9% 15% 49% 28% 9% 11% 11% 26% 16% -45% (1) Excludes share-based compensation and non-recurring expenses otherwise allocable to given expense category.


 
Reinventing Marketing for the Mobile Era 11 i ti r ti f r t il r Comprehensive Receivables Quarter Ended March 31, 2013 Quarter Ended December 31, 2012 Quarter Ended September 30, 2012 Quarter Ended June 30, 2012 Actuals, Incl. Divested Assets (1) Adjustments (2) Adjusted Actuals, Incl. Divested Assets (1) Adjustments (2) Adjusted Actuals (3) Adjustments (4) Adjusted Accrued Contract Receivables 136$ (36)$ 100$ 133$ (27)$ 106$ # 72$ (10)$ 62$ Trade Receivables 147$ (24)$ 123$ 150$ (22)$ 128$ # 110$ (13)$ 96$ Other Receivables & Current Assets 18$ (18)$ -$ 8$ (8)$ 0$ # 58$ (36)$ 22$ Comprehensive Receivables 300$ (77)$ 223$ 291$ (57)$ 234$ 239$ (59)$ 180$ ÷ Trailing Twelve Months Revenue (5) 260$ 270$ 268$ X Days in Period 360 360 360 = Comprehensive Days Sales Outstanding 309 311 242 (1) Actuals for the quarter ended March 31, 2013 are per U.S. GAAP and include receivables associated w/divested assets; (2) Adjustments for the quarter ended March 31, 2013 include customary adjustments to exclude VAT receivables, government grant receivables, income tax receivables, and other current assets not associated with revenue, and also exclude all receivables associated with the divested assets; note also that "checks receivable" have been re-classified from other receivables & current assets to trade receivables beginning in Q4 2012; (3) Actuals for the quarter ended September 30, 2012 are per U.S. GAAP; all components of comprehensive receivables associated with the divested assets are contained within assets held for sale, which is not a component of comprehensive receivables; (4) Adjustments include customary adjustments to exclude VAT receivables, government grant receivables, income tax receivables, and other current assets not associated with revenue, and also exclude $5.1 million of receivables associated with the termination of our factoring arrangement; (5) Includes revenue of acquired companies as though they had been consolidated for the entire period.


 
Reinventing Marketing for the Mobile Era 12 i ti r ti f r t il r 2nd Quarter and Fiscal Year 2013 Guidance ($ in millions) Low High Low High Revenue Guidance 42.0$ 45.0$ N/A N/A Adjusted EBITDA Guidance (12.0)$ (8.0)$ 5.0$ 15.0$ Free Cash Flow Guidance, Exclusive of Acquisition Payments N/A N/A 5.0$ 15.0$ Qtr. End. June 30th FYE Dec. 31st