textura q3 14 earnings release 11.4.2014 final
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1©2014 Textura Corporation
Textura Corporation – Quarter Ended September 30, 2014
Image: Hudson Yards Redevelopment, New York, NY –a project managed using Textura Construction Collaboration Solutions
2©2014 Textura Corporation
Safe Harbor
This presentation includes forward-looking statements, including statements regarding Textura's future financial performance, market growth, total addressable market, demand for Textura's solutions, and general business conditions. Any forward looking statements contained in this presentation are based upon Textura's historical performance and its current expectations and projections about future events and financial trends affecting the financial condition of its business. These forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. These forward-looking statements are based on information available to Textura as of November 5, 2014, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause such differences include, but are not limited to, trends in the global and domestic economy and the commercial construction industry; our ability to effectively manage our growth; our ability to develop the market for our solutions; competition with our business; abnormal severe winter weather conditions; our dependence on a limited number of client relationships for a significant portion of our revenues; our dependence on a single software solution for a substantial portion of our revenues; the length of the selling cycle to secure new enterprise relationships for our CPM solution, which requires significant investment of resources; our ability to cross-sell our solutions; the continued growth of the market for on-demand software solutions; our ability to develop and bring to market new solutions in a timely manner; our success in expanding our international business and entering new industries; and the availability of suitable acquisitions or partners and our ability to achieve expected benefits from such acquisitions or partnerships, including our acquisition of Latista in December 2013. Forward-looking statements speak only as of November 5, 2014 and we assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable laws. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements. Further information on potential factors that could affect actual results is included under the heading “Risk Factors” in our Annual Report on Form 10-K filed on November 26, 2013 and our other reports filed with the SEC.
This presentation should be read in conjunction with Textura’s September 2014 Earnings Release on the Company’s Investor Relations website at investors.texturacorp.com.
In addition to U.S. GAAP financial information, this presentation includes certain non-GAAP financial measures. These historical and forward-looking non-GAAP measures are in addition to, not a substitute for or superior to, measures of financial performance prepared in accordance with GAAP. A reconciliation between GAAP and non-GAAP measures is included in Textura’s September 2014 Earnings Release on the Company’s Investor Relations website at investors.texturacorp.com, and at the end of this presentation.
3©2014 Textura Corporation
Introduction and Review of Key Highlights
Image: Hudson Yards Redevelopment, New York, NY –a project managed using Textura Construction Collaboration Solutions
Patrick AllinChairman, CEO, Co-founder
4©2014 Textura Corporation
Current Business Processes – Complex, Error Prone, Inefficient
Banks / Insurers
Title Company
Owner / Developer
Sub-contractorsEngineers
Architects
GeneralContractors
Suppliers
ArchitectsFinancing
CompaniesInsurance
Companies
Owner/Developer
GC
Prime Sub Prime Sub
Sub
Material Supplier
Sub Sub Sub
Sub-tier Sub-tier
Sub-tier
Etc.
. . . Material Supplier
Material Supplier
. . .
Sub . . .
Prime Sub . . .
Title Companies
Engineers . . .
DesignPre-
qualificationBid Contracting Construction Close-out
5©2014 Textura Corporation
Textura Solutions – Addressing the Project Lifecycle
DesignPre-
qualificationBid Contracting Construction Close-out
CPM
PlanSwiftSubmittalExchange
GradeBeam
PQMSubmittalExchange
LatistaBidOrganizer
6©2014 Textura Corporation
Approx. $28 billion of Total Addressable Market
MarketExpansion
MonetizationTotal
Addressable Market
TargetGlobal
Markets~$4.8t
Markets Currently
Served~$1.3t
CurrentSolutions~30 bps
Total Future
AddressableMarket~$28.0bCurrent
Marketsand
Solutions~$4.4b
ExpandedPlatform~50 bps
Key Strategies:• North America market
penetration• Global expansion to Asia
and Western Europe
Key Strategies:• Cross-sell solutions• Strategic acquisitions• Solution expansion• Solutions to platform• Pricing
Result:
• Potential for very high long-term revenue growth rates
Expanded Platform
~55-60 bps
CurrentSolutions~34 bps
Mobile+~5–10 bps
Mobile+~4 bps
~$3.9b
Mobile+~$0.5b
~$24.0b
~$4.0b
7©2014 Textura Corporation
Multiple Long-term Growth Opportunities
Marketpenetration
Cross-sellsolutions
Globalexpansion
Relatedmarkets
Strategicacquisitions
Newproducts
Future
US, Canada, Australia
Western Europe,
Developed Asia
Mining
Oil and Gas
Data
Financing
Price
• Approx. 10% penetration
• 7 primary solutions
• Few multi-product clients
• Bundled sales/pricing
• Platform strategy
• Project lifecyclefrom design to operation
• Integrated solutionsuite
SubmittalExchange
GradeBeam
PlanSwift
CPM
PlanSwiftSubmittalExchange
GradeBeam
PQM
BidOrganizer
Latista
8©2014 Textura Corporation
Recent Highlights – Continuing to Execute our Strategy
• Year-over-year revenue growth of 51%
• Organic revenue growth of 43%
• Approximately $155 billion in construction value active on our solutions
Pricing Power
Strong Quarterly Results
Operating Leverage
Growth Strategy
• Improving gross margins, EPS and cash flow trajectory
• Adjusted gross margins from 81% in prior quarter to 82%
• Adjusted EPS loss improved from $0.12 in prior quarter to $0.07
• Positive operating cash flow in the quarter and year-to-date periods
• Increased functionality and expanding market of existing solutions
• Continued integration of solutions and progress towards platform
• Opened first Textura Europe office near London
• Implemented CPM price increase for sub usage fees
• Effective on all new projects after February 1
• Expected to add 2 to 3 basis points of revenue on subcontracted contract value
9©2014 Textura Corporation
Quarter Ended September 30, 2014
Financial Overview
Image: Denver International Airport South Terminal Redevelopment, Denver, CO
– a project managed using Textura Construction Collaboration Solutions
Jillian SheehanEVP and CFO
10©2014 Textura Corporation
Quarter Ended September 30, 2014 Highlights
• 51% year-over-year revenue growth
• Organic revenue growth of 43%
Balance Sheet
Adjusted EPS
Strong Revenue Growth
Expense Trends
Adjusted EBITDA
• 14% Adjusted operating expense growth
• Continuing to see leverage in business model
• Continuing to invest in the development of our solution suite
• $1.0 mm Adjusted EBITDA loss vs. $2.2 mm loss in prior quarter
• Focus on supporting growth and strategic initiatives
• Loss narrowing as a percent of revenue
• $0.07 Adjusted EPS loss vs. $0.12 loss in prior quarter
• Adjusted net loss of $1.8 million vs. $3.0 million in June 2014 quarter
• Weighted-average share count increased to 25.4 million
• $66.0 million cash position at September 30, 2014
• Ample liquidity to fund our growth initiatives
11©2014 Textura Corporation
Consistently High Growth Rates
$12.9
$24.0
$40.8
CY11 CY12 CY13
87% 86% 70%
Year-over-year change
51% 65% 65% 72% 77% 61% 60% 51%
Year-over-year change
45% 46% 38% 45% 50% 46% 52% 43% 77% 69% 69%
Organic growth Organic growth
$6.8
$8.5
$9.4
$10.9
$12.0
$13.8
$15.0
$16.4
Dec 12 Mar 13 Jun 13 Sep 13 Dec 13 Mar 14 Jun 14 Sep 14
12©2014 Textura Corporation
Strong Operating Metrics
Projects Added
Client Reported Construction Value Added
Active Projects
$7.3
$10.6
$13.6
$23.7
$17.9
$19.5 $17.7 $18.2
Dec 12 Mar 13 Jun 13 Sep 13 Dec 13 Mar 14 Jun 14 Sep 14
5,046 5,263
5,701
6,225 6,580
7,052
7,578
8,030
Dec 12 Mar 13 Jun 13 Sep 13 Dec 13 Mar 14 Jun 14 Sep 14
1,048
1,245
1,467 1,511 1,466
1,712 1,729 1,792
Dec 12 Mar 13 Jun 13 Sep 13 Dec 13 Mar 14 Jun 14 Sep 14
13©2014 Textura Corporation
Revenue Model – Broad Base of Paying Customers
• Revenue from multiple participants
• Fees are invoiced and collected in advance
• CPM - highly sticky, recurring, and visible
CPM
PlanSwift
SubmittalExchange
GradeBeam
PQM
Activity-driven
• Owners/GCs• Subscription fees based on
project activity –total number of projects/construction value
• Subcontractors• Contract usage fee – varies by
value of contract and subject to minimum and maximum fees
Organization-driven
• Primarily organization annual subscription fees
• Fees based on:• Construction volume,
number of offices/subcontractors
BidOrganizer
Latista
14©2014 Textura Corporation
2014 Guidance
• 45 – 48% year-over-year revenue growth
• $17.4 – $17.8 million
• Adjusted EPS of ($0.02) – ($0.04)
• Excludes stock based comp of $2.0 million & amortization of acquired intangible assets of $1.1 million
• Assumes ~25.5 million shares
Quarter Ended December 31,
2014
Year Ended December 31,
2014
• 53 - 54% year-over-year revenue growth
• $62.5 – $62.9 million
• Adjusted EPS of ($0.37) – ($0.39)
• Excludes stock based comp of $8.5 million & amortization of acquired intangible assets of $5.0 million
• Assumes ~25.2 million shares
15©2014 Textura Corporation
Long-term Operating Model Yields Highly Attractive Margins
CY2013March2014
Quarter
June 2014
Quarter
September 2014
Quarter
CY2014Guidance
Target Future Model
(2 to 3 yrs.)
Revenue $40.8
Million$13.8
million$15.0
million$16.4
million$62.5 - $62.9
million$150 – 180
million
Adjusted operating expenses* as % of revenue:Cost of servicesGeneral and administrativeSales and marketingTechnology and development
Total adjusted operating expenses*
22%44%30%41%
137%
20%35%33%37%
124%
19%36%29%30%
115%
18%31%29%28%
106%
10% - 13%13% - 15%17% - 20%15% - 17%
55% - 65%
Adjusted gross margin* 78% 80% 81% 82% 87% - 90%
Adjusted EBITDA margin (37)% (24)% (15)% (6%) (15) - (16)% 35% - 45%
* See the reconciliation of these non-GAAP measures to the most comparable GAAP measures in the tables included at the end of this presentation.
16©2014 Textura Corporation
Image: World Trade Center Transportation Hub, New York, NY –a project managed using Textura Construction Collaboration Solutions
Questions . . . and Thank You
17©2014 Textura Corporation
Appendix
Reconciliation of non-GAAP measures
to the most comparable GAAP measures
18©2014 Textura Corporation
Quarter Ended March 31, 2014
GAAP
Share-Based
Compensation
and
Amortization of
Intangible
Assets
Other Non-
Recurring
Expenses * As Adjusted
% of
Revenue
Revenues 13,787$ -$ -$ 13,787$ 100%
Operating expenses
Cost of services 2,882 152 - 2,730 20%
General and administrative 6,055 1,191 74 4,790 35%
Sales and marketing 4,843 312 - 4,531 33%
Technology and development 5,356 281 - 5,075 37%
Depreciation and amortization 1,886 1,282 - 604 4%
Total operating expenses 21,022 3,218 74 17,730 129%
Total operating expenses, excluding
depreciation and amortization
19,136 1,936 74 17,126 124%
Loss from operations (7,235) (3,218) (74) (3,943)
Total other expense, net (25) - - (25)
Loss before income taxes (7,260) (3,218) (74) (3,968)
Income tax provision 80 - - 80
Net loss (7,340)$ (3,218)$ (74)$ (4,048)$
Gross profit 10,905$ 11,057$
Gross margin 79% 80%
Adjusted EBITDA ** (3,339)$
Adjusted EBITDA Margin (24%)
* Other non-recurring expenses represent acquisition-related costs.
** Adjusted EBITDA represents revenue less adjusted operating expenses, excluding depreciation and amortization.
(dollars in thousands)
19©2014 Textura Corporation
Quarter Ended June 30, 2014
GAAP
Share-Based
Compensation
and
Amortization of
Intangible
Assets As Adjusted
% of
Revenue
Revenues 14,965$ -$ 14,965$ 100%
Operating expenses
Cost of services 3,028 156 2,872 19%
General and administrative 6,473 1,049 5,424 36%
Sales and marketing 4,663 324 4,339 29%
Technology and development 4,819 301 4,518 30%
Depreciation and amortization 1,962 1,282 680 5%
Total operating expenses 20,945 3,112 17,833 119%
Total operating expenses, excluding
depreciation and amortization
18,983 1,830 17,153 115%
Loss from operations (5,980) (3,112) (2,868)
Total other expense, net (8) - (8)
Loss before income taxes (5,988) (3,112) (2,876)
Income tax provision 80 - 80
Net loss (6,068)$ (3,112)$ (2,956)$
Gross profit 11,937$ 12,093$
Gross margin 80% 81%
Adjusted EBITDA * (2,188)$
Adjusted EBITDA Margin (15%)
* Adjusted EBITDA represents revenue less adjusted operating expenses, excluding depreciation and amortization.
(dollars in thousands)
20©2014 Textura Corporation
Quarter Ended September 30, 2014
GAAP
Share-Based
Compensation
and
Amortization of
Intangible
Assets
Other Non-
Recurring
Expenses * As Adjusted
% of
Revenue
Revenues 16,354$ -$ -$ 16,354$ 100%
Operating expenses
Cost of services 3,335 90 344 2,901 18%
General and administrative 6,232 1,049 120 5,063 31%
Sales and marketing 5,869 586 592 4,691 29%
Technology and development 6,366 913 802 4,651 28%
Depreciation and amortization 1,990 1,282 - 708 4%
Total operating expenses 23,792 3,920 1,858 18,014 110%
Total operating expenses, excluding
depreciation and amortization
21,802 2,638 1,858 17,306 106%
Loss from operations (7,438) (3,920) (1,858) (1,660)
Total other expense, net (22) - - (22)
Loss before income taxes (7,460) (3,920) (1,858) (1,682)
Income tax provision 80 - - 80
Net loss (7,540)$ (3,920)$ (1,858)$ (1,762)$
Gross profit 13,019$ 13,453$
Gross margin 80% 82%
Adjusted EBITDA ** (952)$
Adjusted EBITDA Margin (6%)
* Other non-recurring expenses include severance expense and acquisition-related and other expenses. Acquisition-related
and other expenses represent acquisition, strategic transaction and certain tax-related costs.
** Adjusted EBITDA represents revenue less adjusted operating expenses, excluding depreciation and amortization.
(dollars in thousands)
21©2014 Textura Corporation
Year Ended December 31, 2013
GAAP
Share-Based
Compensation
and
Amortization
of Intangible
Assets
Other Non-
Recurring
Expenses * As Adjusted
% of
Revenue
Revenues 40,766$ -$ -$ 40,766$ 100%
Operating expenses
Cost of services 12,808 2,198 1,446 9,164 22%
General and administrative 25,152 5,700 1,501 17,951 44%
Sales and marketing 15,153 2,789 308 12,056 30%
Technology and development 20,820 2,863 1,288 16,669 41%
Depreciation and amortization 5,325 3,397 - 1,928 5%
Total operating expenses 79,258 16,947 4,543 57,768 142%
Total operating expenses, excluding
depreciation and amortization
73,933 13,550 4,543 55,840 137%
Loss from operations (38,492) (16,947) (4,543) (17,002)
Total other expense, net (2,530) - - (2,530)
Loss before income taxes (41,022) (16,947) (4,543) (19,532)
Income tax provision (767) (1,086) 319
Net loss (40,255)$ (16,947)$ (3,457)$ (19,851)$
Gross profit 27,958$ 31,602$
Gross margin 69% 78%
Adjusted EBITDA ** (14,923)$
Adjusted EBITDA Margin (37%)
* Other non-recurring expenses include offering-related expense and acquisition-related and other expenses. Acquisition-related
and other expenses represent acquisition, strategic transaction and certain tax-related costs.
** Adjusted EBITDA represents revenue less adjusted operating expenses, excluding depreciation and amortization and excluding
change in fair value of conversion option liability.
(dollars in thousands)
22©2014 Textura Corporation
Quarter Ended September 30, 2013
GAAP
Share-Based
Compensation
and
Amortization of
Intangible
Assets
Other Non-
Recurring
Expenses * As Adjusted
% of
Revenue
Revenues 10,853$ -$ -$ 10,853$ 100%
Operating expenses
Cost of services 3,532 160 550 2,822 26%
General and administrative 6,405 922 301 5,182 48%
Sales and marketing 3,172 142 3,030 28%
Technology and development 4,445 176 4,269 39%
Depreciation and amortization 1,358 840 518 5%
Total operating expenses 18,912 2,240 851 15,821 146%
Total operating expenses, excluding
depreciation and amortization
17,554 1,400 851 15,303 141%
Loss from operations (8,059) (2,240) (851) (4,968)
Total other expense, net (194) - - (194)
Loss before income taxes (8,253) (2,240) (851) (5,162)
Income tax provision 68 - - 68
Net loss (8,321)$ (2,240)$ (851)$ (5,230)$
Gross profit 7,321$ 8,031$
Gross margin 67% 74%
Adjusted EBITDA ** (4,450)$
Adjusted EBITDA Margin (41%)
* Other non-recurring expenses include offering-related expense and acquisition-related and other expenses. Acquisition-related
and other expenses represent acquisition, strategic transaction and certain tax-related costs.
** Adjusted EBITDA represents revenue less adjusted operating expenses, excluding depreciation and amortization.
(dollars in thousands)
23©2014 Textura Corporation
Adjusted EPS
September 30, 2014 June 30, 2014
Net loss per share (0.30)$ (0.24)$
Share-based compensation expense 0.10 0.07
Amortization of intangible assets 0.05 0.05
Severance expense 0.06 -
Acquisition-related and other expenses * 0.02 -
Adjusted EPS (0.07)$ (0.12)$
* Acquisition-related and other expenses represent acquisition, strategic transaction and certain tax-related costs.
Three Months Ended
24©2014 Textura Corporation
Guidance
High End Low End High End Low End
Net loss per share (0.14)$ (0.16)$ (0.98)$ (1.00)$
Accretion of redeemable non-controlling interest - - 0.01 0.01
Share-based compensation expense 0.08 0.08 0.33 0.33
Amortization of intangible assets 0.04 0.04 0.19 0.19
Acquisition-related and other expenses* - - 0.02 0.02
Severance expense - - 0.06 0.06
Adjusted EPS (0.02)$ (0.04)$ (0.37)$ (0.39)$
* Acquisition-related and other expenses represent acquisition, strategic transaction and certain tax-related costs.
Three Months Ended December 31, 2014 Twelve Months Ended December 31, 2014
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