EXA CORP - FORM 8-K - EX-99.1 - INVESTOR PRESENTATION

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8-K - FORM 8-K - EXA CORP	d468129d8k.htm

Investor Presentation

January 2013

Exa Corporation Confidential

Exhibit 99.1

Safe Harbor Statement

Exa Corporation Confidential

Today’s presentation includes forward-looking statements intended to qualify for the

Safe Harbor from liability established by the Private Securities

Litigation Reform Act

of 1995.These forward-looking statements, including statements regarding our

financial expectations, demand for our solutions and growth in our markets, are

subject to risks, uncertainties and other factors that could cause actual results to

differ materially from those suggested by our forward-looking statements. These

factors include, but are not limited to, the risk factors described in our Quarterly

Report on Form 10-Q for the three months ended October 31, 2012, as filed with the

SEC on December 4, 2012. Forward-looking information in this presentation

represents our outlook as of today, and we do not undertake any obligation to update

these forward-looking statements.

During today's presentation we may refer to our Adjusted EBITDA.

This is a non-

GAAP financial measure that has been adjusted for certain non-cash and other items,

and that is not computed in accordance with generally accepted accounting

principles. The GAAP measure most comparable to Adjusted EBITDA is our net

income (loss). A reconciliation of our historical Adjusted EBITDA to our net income

(loss) is included in our registration statement filed with the SEC

Company Overview

Leading Provider of Software that Enables

Simulation-Driven Product Design

Vehicle

Manufacturers

as Customers

90+

13 of the top 15 passenger

vehicle manufacturers

230+

Years of

Revenue Growth

10+

EBITDA positive past 3 years

Highly recurring and visible

business model

Employees

Global

Offices

HQ in Burlington, MA

Detroit, Japan, Germany,

Korea, France, China

Exa Corporation Confidential

Aerodynamics Thermal Acoustics

Key Investment Highlights

Exa Corporation Confidential

Highly-Visible, Consumption-based

Licensing Model

Proprietary, Market Leading Technology

Growing Multi-billion Dollar Market

Opportunity in Transportation Alone

Tangible, Immediate Value Proposition

Top-tier Global Customers

Experienced Management Team

Transportation Market Requirements

Aerodynamics

Faster Turnaround

Time

Weight Reduction

Fewer Prototypes

Increased

Automation

New Powertrains

Efficiency2

Simulation-based

Design

Source: EPA

(1) The United States passenger car and light truck CAFE standard continues to rise to 56.2 MPG by 2025

(1)

Traditional Development Process

Expensive ($bn),

cumbersome

& time-consuming

Brute-force

approach

Exa‘s Vehicle Development Process

Days

Accurate Results

Geometric Complexity

Proprietary Algorithms

Global Customer Base

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Passenger Vehicle

Truck & Off-Highway

Supplier/Other

Aerospace

How JLR Uses Exa’s PowerFLOW

The Problem

Reduce joint fleet CO2 to meet global

emissions target by 2020+

Portfolio Diversification

Reduce cost of prototypes

Enable digital sign-off

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The Results

Thermal Mgmt & Aerodynamic prototypes

eliminated prior to production tooling release

Further elimination opportunities for

Aeroacoustics & water mgmt in development

Customer Case Studies

The Problem

Demand for more fuel efficient trucks

Top buying requirement

The Results

24% reduction in aerodynamic drag

12% improvement in fuel economy

~$5,600 annual fuel savings per vehicle

Customer Case Studies –

Trailer Devices

Customer Engagement Model

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Annual

Renewals

Deeper

Deployment

Upgrades

New

Applications

Capacity-Based

Licensing On

Demand

or On Premise

PowerFLOW Product Suite

Simulation Preparation

(User-based License)

Simulation

PowerDELTA

Import, sort and organize CAD model

Apply parametric mesh features

Generate surface meshes & check

quality

PowerFLOW

Automatic fluid discretization

Automatic multi-processor

parallelized simulation

~80% of license revenue

PowerINSIGHT

™

Streamline & automate the

results generation,

analysis, and reporting process

PowerVIZ

Analyze results and flow structures

with interactive 3D data

visualization, movies, & graphs

PowerTHERM

Fully-coupled 3D

conduction

& radiation solver

PowerCOOL

Fully-coupled

cooling system

model

PowerCASE

™

Set up simulation case parameters

& boundary conditions

PowerCLAY

Morph mesh real-time

for rapid design iteration

& optimization

PowerACOUSTICS

Analyze and predict acoustic noise

transmission to the interior

Design Iterations

Simulation Analysis

(User-based License)

(Consumption-based License)

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Exa Corporation Confidential

Deep Domain Expertise

Return on Investment

Differentiated Go-to-market Strategy

Why We Win

Highest Degree of Simulation Accuracy

Faster Turnaround Time

Growth Strategy

Exa Corporation Confidential

•

Migrating from

physical to digital-

based approaches

Penetrate New

Geographies

Enable

Additional

Applications &

Solutions

Add New

Customers in

Ground

Transportation

Explore New

Verticals

Deepen

Existing

Customer

Base

Selectively

Pursue

Acquisitions

•

Identify new

applications to

address customer

needs

•

Significantly

underpenetrated

•

Adjacent markets

•

Expanding

presence in BRIC

•

Core technology is

extendable to

Aerospace, Oil &

Gas and Power

Generation

among others

•

Complementary

businesses &

technologies

Ed Furlong

Chief Financial Officer

Exa Corporation Confidential

Key Financial Highlights

Exa Corporation Confidential

Attractive Long-term Model

Profitable & Cash Flow Positive

Recurring & Predictable Business Model

Strong, Consistent Revenue Growth

Consistent Revenue Growth

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$4.6

$8.0

$12.8

$16.3

$20.3

$28.0

$34.1

$35.6

$37.9

$45.9

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Revenue

$MM (FYE Jan 31)

Note: We changed from a December 31 calendar year-end to a January 31st fiscal year-end at the end of December 2006.

$(3.0)

$(5.5)

$5.0

$4.7

$7.1

2008

2009

2010

2011

2012

Adjusted EBITDA

$MM (FY E Jan 31)

History of Profitability

Exa Corporation Confidential

(10.6%)

(16.2%)

14.2%

12.3%

15.4%

2008

2009

2010

2011

2012

Adjusted EBITDA Margin

(FYE Jan 31)

Note: Please see Appendix for detailed definition and reconciliation of Adjusted EBITDA to the comparable GAAP financial measure of net income

(loss). We define EBITDA as net income (loss), excluding depreciation and amortization, interest expense, other income (expense), foreign

exchange gain (loss) and provision for income taxes. We define Adjusted EBITDA as EBITDA, excluding non-cash share-based compensation

expense.

97%

87%

80%

91%

97%

140%

116%

95%

113%

123%

2008

2009

2010

2011

2012

License Renewal Rate

(FY E Jan 31)

Renewals on base capacity

Renewals including upgrades

and expanded capacity

60%+ of our annual revenue was

attributable to contracts in place at

the beginning of the fiscal year

We expect our annual license revenue

renewal rate with capacity expansion

to remain over 100%

We expect to maintain a license

revenue renewal rate in the range of

85% to 100%

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Highly Recurring & Predictable Model

100%

Note:

Please see Appendix for detailed definition and reconciliation of Adjusted EBITDA to the comparable GAAP financial measure of net income (loss). We

compute our license revenue renewal rate for any fiscal year by identifying the customers from whom we derived license revenue in the prior fiscal year and

dividing the dollar amount of license revenue that we receive in the current fiscal year from those customers by the dollar amount of license revenue we

received from them in the prior fiscal year.

64%

100%

12%

20%

Revenue Visibility

(FY E Jan 31)

Renewals

New

Licenses

Projects

New &

Renewal

Licenses at

Beginning of Year

Annual consumption-based licenses

Increased consumption of simulation

capacity drives growth

Delivered on-premise or on-demand

Ratable revenue recognition

Project revenue is primarily derived

from simulation capacity

10 -

15% of project revenue is in

deferred revenue at beginning of year

Exa Corporation Confidential

Revenue Detail

Note:

compute

our

license

revenue

renewal

rate

for

any

fiscal

year

identifying

the

customers

from

whom

derived

license

revenue

the

prior

fiscal

year and dividing the dollar amount of license revenue that we receive in the current fiscal year from those customers by the dollar amount of license revenue

we received from them in the prior fiscal year.

Exa Corporation Confidential

Revenue Mix

Note: Data as of FY 2012

Managing business with focus on revenue growth combined with steady

improvement in Adjusted EBITDA margin

Continue to invest in Sales team to deepen existing customer

penetration and add new customers

Improve margins due to operating leverage, especially in R&D and

G&A

Targeting long-term adjusted EBITDA margin in low to mid 20% range

Target Model

Appendix

Exa Corporation Confidential

Exa Corporation Confidential

*See Appendix

Key Financial Metrics

FY 10

FY11

FY12

1Q13

2Q13

3Q13

Revenue

License

$26.8

$30.6

$38.7

$10.0

$10.2

$10.4

Project

8.8

7.3

7.2

1.3

1.6

2.3

Total Revenue

$35.6

$37.9

$45.9

$11.3

$11.8

$12.7

Revenue Growth

21%

10%

Operating Expenses

Cost of Revenues

9.9

12.0

3.2

3.1

3.6

Sales & Marketing

5.2

6.0

6.1

1.6

1.7

1.5

Research & Development

12.5

12.6

14.2

4.1

4.0

General & Administrative

5.6

6.3

7.9

1.9

1.7

Non-GAAP Operating Income*

$2.3

$3.1

$5.7

$0.5

$1.2

Adj. EBITDA*

$5.0

$4.7

$7.1

$1.0

$1.6

Adjusted EBITDA and Non-GAAP Operating Income

–

Definitions and Reconciliations

Non-GAAP Operating Income

April 30,

July 31,

October 31,

(In thousands)

2010 Restated

2011 Restated

2012

Operating income

934

2,833

5,019

273

918

841

Add back:

Stock based compensation expense

1,406

281

636

241

234

235

Amortization of acquired intangible assets

Non-GAAP operating income

2,340

3,114

5,720

514

1,249

1,173

Three Months Ended

Year Ended January 31,

Adjusted EBITDA Reconciliation

(In thousands)

2010 Restated

2011 Restated

2012

Net (loss) Income

(1,013)

395

14,456

898

(36)

Depreciation and amortization

2,702

1,562

1,405

460

474

541

Interest expense, net

672

1,411

1,284

412

409

403

Other (income) expense

(12)

(10)

213

(66)

(445)

(2)

Foreign exchange loss (gain)

766

198

106

(326)

115

Provision for income tax

521

839

(11,040)

(84)

382

362

EBITDA

3,636

4,395

6,424

733

1,392

1,383

1,406

281

636

241

234

235

Adjusted EBITDA

5,042

4,676

7,060

974

1,626

1,618

October 31,

April 30,

Non-cash, share based

compensation expense

Year Ended January 31,

July 31,

Three Months Ended

To supplement our consolidated financial statements, which are presented on a GAAP basis, we disclose Non-GAAP Operating Income and Adjusted EBITDA, non-GAAP

measures that exclude certain amounts. These non-GAAP measures are not in accordance with, or an alternative for, generally accepted accounting principles in the United States.

The GAAP measures most comparable to Non-GAAP Operating Income and Adjusted EBITDA are GAAP income from operations and GAAP net income (loss), respectively.

Reconciliations of these non-GAAP financial measures to the corresponding GAAP measures are included above.

We define non-GAAP operating income as GAAP operating income excluding non-cash, stock-based compensation expense and amortization of acquired intangible assets. We

define EBITDA as net income (loss), excluding depreciation and amortization, interest expense, and other income (expense), foreign exchange gain (loss) and provision for income

taxes. We define Adjusted EBITDA as EBITDA, excluding non-cash share-based compensation expense.

Note:

Ground Transportation Applications

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