Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - Mattersight Corp | d301039d8k.htm |
| EX-99.1 - PRESS RELEASE - Mattersight Corp | d301039dex991.htm |
 Mattersight
Q4 2011 Earnings Webinar
February 15, 2012
1
Exhibit 99.2 |
 2
Safe Harbor Language
During today’s call we will be making both historical and
forward-looking statements in order to help you better
understand our business. These forward-looking statements
include references to our plans, intentions, expectations,
beliefs, strategies and objectives. Any forward-looking
statements speak only as of today’s date. In addition, these
forward-looking statements are subject to risks and
uncertainties that could cause actual results to differ
materially from those stated or implied by the forward-
looking statements. The risks and uncertainties associated
with our business are highlighted in our filings with the SEC,
including our Annual Report filed on Form 10-K for the year
ended January 1, 2011, our quarterly reports on Form 10-Q,
as well as our press release issued earlier today.
Mattersight undertakes no obligation to publicly update or
revise any forward-looking statements in this call. Also, be
advised that this call is being recorded and is copyrighted by
Mattersight Corporation. |
 3
Key Themes for Today’s Call
•
Strong Q4 Revenue Growth
•
Very Significant Improvement in Operating Performance
•
Increasing Pilot and Pipeline Activity
•
Releasing Exciting New Products
•
Positive Resolution of TCV Dispute
•
Bookings Continue to be Lumpy |
 Q4
Highlights •
Revenues
Grew Subscription Revenues by 22% sequentially/30% year over year to $6.7
million
Grew Total revenues by 22% sequentially to $8.6 million
•
Bookings
Signed $2.3 million of Managed Services contracts
Ending Backlog was $96.3 million
•
Pilots
Signed three new pilots in Q4
Signed two new pilots Q1 to date
•
Operating Performance
Expanded Gross Margins by 300 bps
Improved operating performance by 1,800 bps
•
IGC Investment and TCV Settlement
Brought in Investor Growth Capital as a new strategic investor
Resolved dispute with TCV
4 |
 Revenue
Review 5
Revenue
Type
Q4
Actual
Sequential
Change
Year/Year
Change
Subscription
Revenues
$6.7m
22%
30%
Amortized
Deployments
Fees and Add On
Consulting Revenues
$1.6m
24%
3%
Total
Behavioral
Analytics Revenues
$8.3m
23%
24%
Other Revenues
$0.3m
7%
-70%
Total
Revenues
$8.6m
22%
12% |
 Pilot
Activity 6
*Includes two new pilots signed and existing pilot converted quarter to date
0
2
4
6
8
10
Q3
2010
Q4
2010
Q1
2011
Q2
2011
Q3
2011
Q4
2011
Q1
2012*
0
2
1
1
2
3
2
1
4
4
2
5
8
9
New Pilots
Total Pilots |
 7
Bookings and Pipeline Discussion
•
Q4 Commentary
Our Q4 bookings were adversely impacted by 3 contracts totaling ~$8.2 million which
were
approved,
but
for
which
we
did
not
complete
the
procurement
process
Two of these deals, totaling ~$6.0 million, have closed in Q1
•
Bookings Lumpiness
Our bookings
will
continue
to
be
lumpy
in
2012
based
on
the
size
and
maturity
of
our
team and the size of our deals
•
Pipeline Growth
Total Pipeline up 130%, year over year
New Logo Pipeline is up 300%, year over year
•
Salesforce Growth and Maturity
AE Tenure
# of AE’s
% of Pipeline
0-6 Months
4
4%
6 to 18 Months
7
40%
18 to 36 Months
2
13%
36+ Months
4
43%
Total
17
100% |
 Backlog (in
Millions) 8
$58.9
$84.5
$80.1
$100.0
$102.3
$96.3
$-
$20.0
$40.0
$60.0
$80.0
$100.0
$120.0
Q3 2010
Q4 2010
Q1 2011
Q2 2011
Q3 2011
Q4 2011
Revenue Retention rate is 95%
Average Term is 31 Months |
 New Product
Overview: Predictive CSAT and Predictive Routing •
CSAT Predictive Analytics Product
Overview
Use Behavioral Analytics data to
create models to predict Customer
Satisfaction
•
Unique Technology
All interactions indexed to the
customer level
Leverage hundreds of new data
attributes automatically scored on
every interaction
•
Benefits/Positioning
Create CSAT score on all customer
interactions without the need for
customers to complete a survey
Produce large, statistically valid
samples
Drive actionable results down to the
employee level
•
Customer Activity
Sold a $1.3 million add-on at large
P&C client
Working on several other proposals
for new CSAT model pilots
•
Predictive Routing Product Overview
Use Behavioral Analytics to drive
customer routing decisions
•
Unique Technology
Leverage data in our Behavioral
Analytics Data Mart
Drive call routing using our Predictive
Routing Engine
•
Benefits/Positioning
Significantly improve efficiency by
routing customers to the best person
available based on performance data
Enhance the customer experience by
routing customers based on the data
from their previous interactions
•
Customer Activity
Successfully completed our initial pilot
project in Q4
Working on two deployment contracts
at existing clients
9 |
 Discussion of
Operating Results 10
Income Statement
Category
Q2
2011
Q3
2011
Q4
2011
Target
Model
Comments
Subscription Revenues As a %
of Total Revenues
75%
78%
78%
90%
Subscription Revenues % Will
Continue to Grow in 2012
Gross Margin
52%
54%
57%
65%
Expect to See Further GM
Expansion in 2012
Sales and Marketing
31%
32%
30%
20%
Will Continue to Invest
Significantly in 2012
Development
27%
29%
21%
13%
Should Continue to Decrease as
% of Revs in 2012
Contribution Margin
-6%
-7%
6%
32%
G&A
29%
22%
17%
7%
Should Continue to Decrease as
% of Revs in 2012
Adjusted EBITDA
-35%
-29%
-11%
25%
Net of the IGC and TCV transactions, we generated ~$1.8 million in
cash in Q4 |
 IGC Investment
and TCV Settlement •
IGC Investment
Bought $6 million in common stock from the company at $4.79/share
IGC also purchased 1.1 million shares of common stock directly from TCV
IGC currently own ~13% of Mattersight
IGC’s Investment Thesis
•
Large, nascent market
•
Strong customer references
•
Significant opportunity to build a rapidly growing SaaS analytics franchise
•
TCV Settlement
Mattersight purchased all of TCV’s Series B Preferred shares for $16.1 million
Paid
$12.5
million
of
this
amount
in
Q4;
the
remaining
amount
is
to
be
paid
by
the
end of 2012
•
Benefits of the Transactions
Settled the arbitration with TCV and eliminated the $18.1 million Restricted Cash
obligation
Reduced the number of fully diluted shares of Common Stock by 620,196 shares to
18,605,900
Eliminated $9.6 million of the $18.1 million liquidation preference relating to the
Series B Preferred Stock
Reduced the Company’s annual dividend obligation with respect to the Series B
Preferred Stock by approximately $675,000
Brought new capital into the Company from highly regarded, strategic investors
11 |
 12
Q1 Guidance and Summary |
 Q1
Guidance 13
•
Subscription Revenues
6% Sequential growth
50% year over year growth
•
Total Revenues
5% sequential growth
37% year over year growth |
 14
Large, Untapped Market
•
US TAM of $5+ billion per year
•
<5% penetrated
Large Opportunity with Existing Customers
•
Existing customer opportunity ~$200 million
•
<15% penetrated
Sticky Customer Relationships
•
Avg. contract term of 3+ years
•
Top 3 retail bank, top 4 P&C companies, 3
of the top 5 HMOs, large Cable Co.
•
+95% revenue retention rate
•
Large backlog (~$100M)
Investment Highlights
We Drive Significant Customer Value
•
Avg. ROI to customers of 3x to 5x
•
Cross-sell/up-sell drives 30%+ rev growth
Positive Current Developments
•
Approaching $40 million revenue run rate
•
Added new, strategic investor
•
Increasing Pipeline and operating leverage
Unique Analytics, SaaS+ Model
•
Leader in conversational analytics
•
Significant value on top of traditional SaaS
•
We do all the heavy lifting for our clients
•
Our analytics teams are strategic advisors
•
Our data is used for comp and routing |
 15
Thank You
•
Kelly Conway
312.454.3579
•
Bill Noon
847.582.7019
bill.noon@mattersight.com
kelly.conway@mattersight.com |