blinkx plc FY2013 Results

S. Brian Mukherjee, CEO Edward Reginelli, CFO

May 2013

Safeharbor Statement

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Forward-looking Statements This announcement contains (or may contain) certain forward-looking statements with respect to certain of blinkx's plans and its current goals and expectations relating to its future financial condition and performance and which involve a number of risks and uncertainties. blinkx cautions readers that no forward-looking statement is a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statements. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements sometimes use words such as 'aim', 'anticipate', 'target', 'expect',

'estimate', 'intend', 'plan', 'goal', 'believe', or other words of similar meaning. Examples of forward-looking statements include, among others, statements regarding blinkx's future financial position, income growth, impairment charges, business strategy, projected levels of growth in its markets, projected costs, estimates of capital expenditure, and plans and objectives for future operations of blinkx and other statements that are not historical fact. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and

circumstances, including, but not limited to, UK domestic and global economic and business conditions, the effects of continued volatility in credit markets, market-related risks such as changes in interest rates and exchange rates, the policies and actions of governmental and regulatory authorities, changes in legislation, the further development of standards and interpretations under International Financial Reporting Standards ("IFRS") applicable to past, current and future periods, evolving practices with regard to the interpretation and application of standards under IFRS, the outcome of pending and future litigation, the success of future acquisitions and other strategic transactions and the

impact of competition - a number of which factors are beyond blinkx's control. As a result, blinkx's actual future results may differ materially from the plans, goals, and expectations set forth in blinkx's forward-looking statements. Any forward-looking statements made herein by or on behalf of blinkx speak only as of the date they are made. Except as required by the FSA, AIM or applicable law, blinkx expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this announcement to reflect any changes in blinkx expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based.“ www.blinkx.com,

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Agenda

Market Overview

Technology Overview

blinkx Business Model

Financial Performance

Appendix

Corporate Snapshot

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History Founded 2004 IPO 2007

Headquarters London, UK San Francisco, CA

Locations Boston, Cambridge, Chicago, London, Los Angeles, Montreal, New York, San Francisco, Seattle, Tempe

Employees 255 Total : 157 Sales & Marketing, 62 Research & Development, 36 General & Administrative

Technology blinkx Video Search Engine and AdHoc Advertising Platform

Financials

$198.0M – Revenue (+73% YOY) $30.2M – Adjusted EBITDA1 (+111% YOY) $55.9M – Cash (+45% YOY)

Partnerships 40+ Agencies 900+ Content Partners 1000+ Brands 3000+ Publishers

1. Adjusted for acquisitions and exceptional expenses, share based compensation, other income

FY2013 Highlights

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INDUSTRY

•  Ad Spending on Online Video sector grew by 46.5% from 1.9B in 2011 to 2.9B in 2012

•  Yet this represents less than 5% of the total ad spend on traditional TV, c.$65B in 2012

•  Rapid and sustained move from experimental to incremental budgets

FINANCIALS

•  Revenue grew by 73% to $198.0m, from $114.4m in FY 2012

•  Adjusted1 profit before tax was up 129% to $24.6m, from $10.7m in FY 2012

•  Adjusted EBITDA2 was up 111% to $30.2m, and grew to 15.3% from 12.5% of Revenue

•  Net Cash balance grew to $55.9m up from $38.4m as of 31 March 2012

OPERATIONS •  Launched mobile-ready, touch enabled video search, discovery and advertising platform

•  New Content, Audience and Advertising Partnerships (Kiplinger, Sony, Kellogg, Nike, Mattel)

•  Completed front end integrations of 2011 acquisitions to extend scale, scope and reach

•  Successful senior management transitions, including CEO and CFO roles

OUTLOOK

•  Captive growth opportunity, based on 87% of interactions remain un-monetized

•  Primary execution focus on Advertiser and Content relationships to drive organic growth

•  Mobile capability at scale remains key opportunity to drive 4 Screen Video Advertising vision

1.  Does not include acquisition and exceptional expense, purchase intangibles Includes, or share base compensation 2.  Adjustments include acquisitions and exceptional expenses, share based compensation and other income

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Agenda

Market Overview Video in a Hyper-Connected World

Technology Overview Content, Fragmentation, Video Search and Discovery

blinkx Business Model Monetizing Ad Interactions Online

Financial Performance FY2013 Results and Historical Trends

Appendix Conclusions and Supporting Data

68% 69% 69% 70% 70% 70% 70%

29% 32% 33% 35% 37% 38% 39%

2011 2012 2013 2014 2015 2016 2017

Broadband Household Penetration Worldwide

Video in a Hyper-Connected World

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Online video constitutes 51% of consumer Internet traffic, and will reach 55% in three years

By 2016, 1.2 million minutes of video – or 833 days – will traverse the Internet every second

Online video viewers worldwide are expected to grow from 1.1 Billion in 2011 to 1.6 Billion in three years

Worldwide

U.S.

Source: Cisco Systems, eMarketer

Online Video Traffic Worldwide

10

17 21

27

35

45

2011 2012 2013 2014 2015 2016

1000 Petabytes/ Month

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Then Now

Proliferation of Connected Devices

9

By 2016, there are expected to be 3.4 billion Internet users — about 45% of the world’s projected population. On average, there will be more than two Internet connections for each person on Earth, driven by the proliferation of web-enabled mobile devices.

140 117 98 49

Source: Cisco Systems, eMarketer

93

121

140

160

34

55

76

90

2011 2012 2013 2014

US Smartphone Penetration (M) Avg. Time (Min) Spent With Media (WW) 2011

Advertisers Following Audience

10

INTERNET Targeting, tracking,

measurability

TV Emotive, story-telling,

brand building

1. eMarketer ,US only 2. Wall Street Journal, US only

MOBILE Untethered, broadband,

anytime, anywhere

Online Video Total

Online Video Ad Spend1

$B

2

3

5 6

8 9

2011 2012 2013 2014 2015 2016

Online Video v Total Ad Spend1

2 3 5 6 8 9

159 170 176 184 190 197

2011 2012 2013 2014 2015 2016

$B

65

Television

Mobile Ad Spend2

2

5

8

12

16

2011 2012 2013 2014 2015

$B

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Agenda

Market Overview Video in a Hyper-Connected World

Technology Overview Content, Fragmentation, Video Search and Discovery

blinkx Business Model Monetizing Ad Interactions Online

Financial Performance FY2013 Results and Historical Trends

Appendix Conclusions and Supporting Data

Online Video Consumption

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Video Producer

Consumer Advertiser

Web Publisher

Value Flow

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Video Producers (Motortrend)

Consumers (You)

Advertisers (Toyota)

Web Publishers (CarPages.co.uk)

$$$

$

Content

Att

en

tion

Co

nte

nt

Fragmentation

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Advertisers

Web Publishers

$$$

$

Content

Att

en

tion

Co

nte

nt

Au

die

nc

e

Video Producers

Consumers

The blinkx Engine

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Video Producers

Web Publishers Agencies

AD

AD

AD

The blinkx Internet Engine automatically matches consumers with video content and advertising on behalf of hundreds of brands

millions of times a day – automatically and in real time.

Consumers Advertisers

blinkx Revenue Equation

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blinkx.com

Advertising Exchanges

Direct Sales Team

Ask.com, Aol.com, & Others

Agencies

Consumers

Video Producers

Advertisers Supply Demand

Scale, Scope and Reach

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Mobile Sales

Trading Platforms

Integrated Advertising Campaigns

blinkx.com

Advertising Exchanges

Direct Sales Team

Mobile

Connected TV

Ask.com, Aol.com, & Others

Display Publishers

(2500)

Search Publishers

(500)

Agencies

Consumers

Video Producers

Advertisers

Supply Demand

The blinkx Ecosystem

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Video Producers

Aggregators Agencies Web Publishers Advertisers

Text v. Video Search

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Text search engines miss the VIDEO in Video Search blinkx actually WATCHES the video

President Barack Obama speech on sequestration

April 30, 2013

Tags: President, Obama, Sequestration

http://videos.huffingtonpost.com/white-house-on-sequestration

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blinkx CORE Concept Recognition Engine based on a patented combination of Shannon’s Information Theory and Bayesian Inference

Advanced textual analysis, page and site-level human design context analysis and visual spidering with support for over 200 video and audio metadata file formats.

Textual Speech

Recognition

Continuous, speaker independent, large vocabulary speech recognition. Neural Network and Hidden Markov Model-based acoustic language modelling

Visual Analysis: Real-time scene decomposition, On-screen Character and Facial Recognition, visual and metadata Closed-Caption extraction

Visual Analysis

Search Discovery

Advertising

blinkx Technology

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Agenda

Market Overview Video in a Hyper-Connected World

Technology Overview Content, Fragmentation, Video Search and Discovery

blinkx Business Model Monetizing Ad Interactions Online

Financial Performance FY2013 Results and Historical Trends

Appendix Conclusions and Supporting Data

Audience

Content

Advertisers

Licensed Indexed

Direct Sold

Platform Traded

Search

blinkx

Syndicates

Display

Connected TV

Mobile

Monetisation

Business Model

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Conventional

Premium

Opportunity

2013 KPIs

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Premium Conventional Tech & Svcs Total Opportunity

Description High Value direct sold or exchange traded campaigns, including video, rich media, display, search

High volume, campaigns typically non-rich media display ad units sourced from third parties

Technology and services related to managing digital assets and advertising services that support current revenue streams

Total of Premium, Conventional, and Tech & Svcs

Access to interactions blinkx.com, blinks Syndicates and Affiliates and and emerging channels, mobile, ConnectedTV

Revenue ($) Revenue (%)

$154.8M 78%

$36.0M 18%

$7.1M 4%

$197.9M 100%

N/A

eCPM ($) $4.75 $0.84 N/A N/A N/A

Interactions (B) Volume (%)

33 5.8%

43 7.6%

N/A 568 100%

492 86.6%

Key Trends •  Device proliferation

•  Digital spend growth

•  eCPM Seasonality

•  Trading Platforms

•  Growing volume

•  Volatile pricing •  Higher prices

for targeted data buys

•  Lower prices for un trageted reach buys

•  High strategic value

•  Insight into actual spend patterns

•  Leverage and drive content partnerships

•  Captive, in-house opportunity

•  Direct and exchange traded campaigns

•  Potential monetization

KPI Trends1

25 1.  Note: Figures above are unaudited

8.0 6.4

13.4

19.1

7.5 9.3

17.7

25.4

-

50

100

150

200

250

300

0

5

10

15

20

25

30

1H '12 2H '12 1H '13 2H '13

Premium

Conventional

Opportunity

Interactions, (B)

0

50

100

150

200

250

300

350

1H '12 2H '12 1H '13 2H '13

Opportunity Premium Conventional

Volume Trends, (B)

Revenue Contribution, (%)

80% 80% 77% 79%

11% 16% 18% 18% 9%

4% 5% 3%

1H '12 2H '12 1H '13 2H '13

Premium Conventional Tech & Services

Pricing Trends, ($/eCPM)

$4.45 $4.78 $4.67 $4.80

$0.67 $0.66 $0.82 $0.85

1H '12 2H '12 1H '13 2H '13

Premium Conventional

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Agenda

Market Overview Video in a Hyper-Connected World

Technology Overview Content, Fragmentation, Video Search and Discovery

blinkx Business Model Monetizing Ad Interactions Online

Financial Performance FY2013 Results and Historical Trends

Appendix Conclusions and Supporting Data

Historical Trends

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1

3 4 6 8 13 21

27 39 45

70 82

116

H1 '08

H2 '08

H1 '09

H2 '09

H1 '10

H2 '10

H1 '11

H2 '11

H1 '12

H2 '12

H1 '13

H2 '13

Revenue, $M Revenue, $M

-8

-4 -5 -4

-8

-3

2

6

2

7 5

17

H1 '08

H2 '08

H1 '09

H2 '09

H1 '10

H2 '10

H1 '11

H2 '11

H1 '12

H2 '12

H1 '13

H2 '13

Operating Cash Flow, $M Operating Cash Flow, $M Operating Cash Flow, $M

Adjusted1 EBITDA, $M

1. Adjusted for share based compensation and other income

20

10 8

6 7

3 1

-5 -5 -3 -4

-2

2H '13

1H '13

2H '12

1H '12

2H '11

1H '11

2H '10

1H '10

2H '09

1H '09

2H '08

1H '08

17

8 6 5 5

2

-2

-7 -6

-3 -4 -7

2H '13

1H '13

2H '12

1H '12

2H '11

1H '11

2H '10

1H '10

2H '09

1H '09

2H '08

1H '08

Adjusted PBT, $M

Key Financials

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FY 2012 FY 2013 Variance ’12 to ’13

Revenue, $M $114.4 $198.0 73%

Adjusted EBITDA1, $M %

$14.3 12.5%

$30.2 15.3% 111%

Adjusted Basic EPS2 Cents 3.60 6.98 94%

Cash, $M $38.4 $55.9 45%

1.  Adjustments include acquisitions and exceptional expenses, share based compensation and other income 2.  Adjustment include [exceptions, purchased intangibles and other income

Operational Gearing

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-100.5% -62.5% -12.9%

15.0% 12.5% 15.2%

-120%

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

$0

$50

$100

$150

$200

$250

FY '08

FY '09

FY '10

FY '11

FY '12

FY '13

Adjusted EBITDA, % Total Revenue, $ Total Operating Expenses, $

Total Revenue and Operational Expenses, $M

EBITDA Bridge

30

FY 2013 ($M)

16.7

30.2

PBT Amortisation, Depreciation

Purchase Intangibles

Amortization

EBITDA Acquisition & Exceptional

Share Based Compensation

Other Income Adjusted EBITDA

+3.6

+5.4 +25.7

+3.3

+2.0 (0.8)

Cash Bridge

31

38.4

55.9

Begining cash Adj EBITDA Working capital

Tax Payments Purchase of PPE

Capitalized internal

dev. charges

Payment on finance

lease

Foreign exchange

Ending cash

+30.2 (2.6) (4.8)

(1.0)

(0.2)

(3.0)

(1.1)

FY 2013 ($M)

Comparative IS and BS

32

114.4

46.6 39.3

8.6 7.0 12.8 1.5

14.3

198.0

97.0

50.5

12.2 10.2 28.1

2.1

30.2

Revenue Cost of Revenue S&M R&D G&A EBITDA Share based comp.

Adjusted EBITDA

FY 2012

FY 2013

Income Statement ($M) Income Statement ($M)

38.4

48.9

29.7 25.8

7.1

25.5

1.7

55.9

49.1

24.7

35.6

11.0

32.8

0.0

Cash Goodwill Intangibles Receivables Def. Tax Asset

Trade Payables Def. Tax Liability

FY 2012

FY 2013

Income Statement ($M) BALANCE SHEET ($M)

Conclusions

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•  Booming segment of a robust sector with strong projected growth

•  Technology-led media business with unique strengths in online video

•  Rapid top line growth with increasing operational gearing •  Scale, scope and reach of acquisitions enhances relevance

•  Near term organic and inorganic opportunities for growth

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Agenda

Market Overview Video in a Hyper-Connected World

Technology Overview Content, Fragmentation, Video Search and Discovery

blinkx Business Model Monetizing Ad Interactions Online

Financial Performance FY2013 Results and Historical Trends

Appendix Conclusions and Supporting Data