Attached files
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| 8-K - interCLICK, Inc. | v196866_8k.htm |
| EX-99.2 - interCLICK, Inc. | v196866_ex99-2.htm |
ThinkEquityPrepared
Remarks
Slide
#1/2: Cover slide/Safe Harbor
Good
afternoon, thank you for your interest in interclick today. Here’s
our safe harbor statement quickly.
Slide
#3: Who is interclick?
For
those of you new to the interclick story, I’ll begin with an overview of the
company, then I’ll discuss our unique offering whichhas catapulted interclick to
the top of the growth companieswithin the online advertising industry and also
on NASDAQ.
We
were founded in 2004, are headquartered here in New York City, with sales
offices in the 7 major markets.
We’ve
recently grown to just over 100 employees, and last week we completely
overhauled our brand identity to coincide with our evolution in the
marketplace.
In
terms of our offering, interclickis the leading technology provider of data
driven advertising.
Central
to our success is Open Segment Manager, or OSM, our proprietary platform
whichhas appropriately solved many if not all of the operational and predictive
challenges associated with data driven advertising.
Ultimately,
OSM determines which data is most predictive for delivering optimum campaign
results — connecting our clients with their consumers with far greater
efficiency and scale than ever before. And we have the numbers to show for it,
as we will discuss in a moment.
Slide
#4: Market Size
This
chart,that many of you have seen, was published by ThinkEquity in May of last
year and provided global market size estimates for the overall online
advertising market.
The
Non-Premium sector of display advertising is projected to grow at a 23% compound
annual growth rate and as you can see is by far the fastest growing category of
the total online advertising market, outpacing even search.
For
anyone here that may be unfamiliar with some of these terms, inventory sold
directly through a site’s own sales forceis defined as the “premium” sector.
Whereas “non-premium” refers to inventorythat is sold through a secondary sales
channel.
All
of this so called unsold inventory is made available at a discount to buyers
such as ad networks, or via ad exchanges and other aggregators.
In
the non-premium sector, advertisers seek to connect directly with their
consumers while de-emphasizing the importance of context.
Technology
like OSM is what enablesmarketers to connect with their consumers, once large
blocks of inventory have been aggregated. This is interclick’s sweet
spot.
Slide
#5: Industry Leading Growth
While
the Non-Premium Display market is growing at a 23% compound annual growth rate,
interclick is significantly outpacing that rate —by achieving 146% growth in
2009, and at least 63% growth in 2010 based on our full year guidance as of
August 4thof at
least $90mm.
Many
people have asked, “How sustainable is your growth?”
In
addressing that question, it’s important to highlight thatthe most successful
companies in online advertising have one thing in common, and that’s a
disciplined approach to the development of superior technological
capabilities.
interclick
is no different. We have not only innovated but have invented new technology
that does not exist elsewhere in the market.
Our
growth is not just fortuitous.We have made the right investments which have
allowed us to grow at this pace and we will continue to invent and improve and
firmly believe that our growth will continue to outpace the
industry.
Slide
#6: Outpacing Public Comparables
Here’s
another data point on how interclick’s performance compares to other digital
companies. This chart shows that interclick’s growth rate is more
that 3X greater than the next fastest growing public comparable, putting us in a
class of our own.
In
fact, we were among the fastest growing publicly-traded companies nationwide
last year, and our 146% increase was entirely organic.
So
the obvious question is,what is driving this growth?
Slide
#7: What is driving our growth?
First
and foremost, interclick’s success has been guided by the unique capabilities of
our OSM platform. This has allowed us to deliver exceptional
results to our clients. Exceptional results lead to more spending by our
clients.
Second,
whiletechnology is the enabler of our business, our operations team is also
highly critical to our clients’ success. Our dedication to TQM throughout our
entire organization – from sales, to supply chain management, to client service–
has allowed us toeliminate defects and inefficiencies while delivering superior
results to our advertisers and also improving efficiency along the
way.
Third,
we have continued to build out our national sales footprint by bringing on some
of the best sales executives across the industry. We have been extremely
successful in attracting and developing long-term relationships with many F1000
brands.
Last
quarter, we provided a snapshot of our successes in these two areas during
Q2. In particular, we hit new highmarksin,
*The
number of advertisers and total campaigns running through our
system
*The
number of new
advertisers and campaigns
*The
number of advertisers that increased spend quarter-over-quarter
*And
the average advertiser eCPM was the highest in company history which reflects
the value we’re generating for our clients.
And
we expect that what has driven our growth historically will continue to fuel
industry-leading performance well into
the
future.
Let’s
touch on the present quarter. While we expect to announce Q3
earnings sometime in early November, I’m happy to say that demand for our
solutions in Q3 is exceeding our expectations. We are not formally providing a
Q3 guidance update today, however I could not be happier with the performance of
our team.
Slide
#8: OSM
The
fulcrum of our company’s recent success has been our breakthrough data platform,
OSM. OSM is a transformative solution that empowers marketers to
discover and create any digital audience by ingesting and organizinga myriad of
data sources, analyzing which facts combine to deliver the most responsive
audiences given specific campaign objectives, and thendeliver those audiences at
unprecedented scale across our network.
We
all know that digital advertising is a completely addressable medium but the key
to unlocking its potential is through the proper application of targeting data,
to effectively separate the signal from the noise.
Since
all sophisticated advertisers are measuring their partner’s performance against
various benchmarks, the difference between success and failure is the proper use
of data. OSM provides the capabilities to our team to ensure proper use of data,
translating to client success, and ultimately greater revenues.
Slide
#9: Third-Party data partners
As
we shift to a world where data driven advertising becomes the standard, 3rd party
data vendors provide the raw materials necessary for success.
We
currently have approximately two dozen third-party data partnerships across 10
different data types from companies like Experian and Acxiom to guys like
BlueKai and Bizo, making interclick the largest consumer of 3rd party
targeting data in the market.
It’s
important to note, however, that while access to third-party data has become
widely available, access is merely the first step; the difference is in the
execution.
And
while many talk about audiences and data, few if any talk about how they can
accurately value those inputs and execute campaigns successfully.
As
previously mentioned, our platform is what makes us so successful. OSM can do
more with targeting data than anyone else in the marketplace.
Slide
#10: Proven technological innovation
From
Google to Facebook, the most successful companies in online advertising are
technology companies at their core.As a result of our innovative technology
stack, combined with our focus on TQM throughout our organization, our approach
has allowed us to transform the productivity and output of the
company.
The
number of impressions we serve per quarter (represented by the red top line and
the primary driver of COGS) has grown by about50%, from 7.98 billion impressions
in Q3’08 to 11.9 billion impressions in Q2 2010, our quarterly revenues
(represented by the blue bottom line) have grown by approximately 275%, from
$5.8mm to $21.7mm over that same period.
Additionally,
theinvestments we’ve made have allowed us to show leverage in our model as we
continue to scale our business. In 2009, we delivered $4.6mm in EBITDA, and this
year we projected, as of August 4th,
full-year EBITDA to exceed $9mm+.
Slide
#11: Summary P&L
Here’s
our summary P&L since 2008. It’s hard to read at such a distance
but noteworthy is the stability of our gross margins over the past several
quarters. First half 2010 gross margins averaged nearly 45%, in the same range
as the prior year average. And we see our gross margins remaining in
the mid-40’s range for the foreseeable future.
As
we continue to scale the business, the inherent leverage in our business model
will become more pronounced. In 2009, our GAAP OPEX/Revenue ratio was
44.3%. The first half of 2010, that ratio dropped to 42%, while in
our most recent quarter (Q2), that ratio dropped further to 38.7%.
We
expect to see that ratio decrease even further in the second half of 2010, which
will be the primary driver of the double-digit level EBITDA margin we’ve guided
to for the full year.
Slide
#12: Summary balance sheet
Here’s
our balance sheet snapshot. One important item of note is our
announcement this morning that we’ve secured a $15mm credit facility with
Silicon Valley Bank, replacing our previous $7mm facility with Crestmark
Commercial Capital.
In
addition to more than doubling our borrowing capacity, we also expect to reduce
our effective cost of capital by approximately 200 basis points.
The
facility is also more flexible, in that the agreement requires no unused line
fee, monthly monitoring fee or minimum interest charge. Clearly our
fast-improving financial performance was a key factor in obtaining this much
more favorable facility.
Slide
#13: Leadership team
Finally,
I’ll end the presentation by highlighting our world class management team, as
these results wouldn’t be possible without their intelligence, experience, and
passion. Our business is run day-to-day by our founder and president
of interclick, Michael Katz. Roger Clark is our CFO, who joined us
over a year ago after serving 15 years at IAC.
Andrew
Katz, our CTO since inception, is the leader of our proprietary, breakthrough
technology platform. Jason Lynn heads up strategy and product for the
company, coming to us from Yahoo!/Right Media by way of Tacoda. And
finally, Dave Myers heads up our operations, after previously serving a total of
14 years at Yahoo!/Right Media and Microsoft.
Slide
#14: Thank you
Thank
you for your time today, I’d now like to open up the floor for
Q&A.