textura march 2014 quarter earnings slides v final

1 ©2014 Textura Corporation

Textura Corporation – Quarter Ended March 31, 2014

Image: Hudson Yards Redevelopment, New York, NY – a project managed using Textura Construction Collaboration Solutions


Safe Harbor

This presentation includes forward-looking statements, including statements regarding Textura's future financial performance, market growth, 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 May 7, 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 PlanSwift in January 2013 and LATISTA in December 2013. Forward-looking statements speak only as of May 7, 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 March 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 March 2014 Earnings Release on the Company’s Investor Relations website at investors.texturacorp.com.

http://investors.texturacorp.com/

http://investors.texturacorp.com/


Introduction and Review of Key Highlights

Image: Hudson Yards Redevelopment, New York, NY – a project managed using Textura Construction Collaboration Solutions

Patrick Allin Chairman, CEO, Co-founder


Investment Highlights

Global market opportunity

Compelling client value proposition

CPM – no competition

High EBITDA margin potential

Exceptional revenue growth

Experienced

team


Current Business Processes – Complex, Error Prone, Inefficient

Banks / Insurers

Title Company

Owner / Developer

Sub-contractors Engineers

Architects

General Contractors

Suppliers

Architects Financing

Companies Insurance

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 . . .

Design Pre-

qualification Bid Contracting Construction Close-out


Textura Solutions – Addressing the Project Lifecycle

Design Pre-

qualification Bid Contracting Construction Close-out

CPM

PlanSwift Submittal Exchange

GradeBeam

PQM Submittal Exchange

Construction Collaboration Solutions®

LATISTA BidOrganizer


Over $28 billion of Total Addressable Market

Market Expansion

Monetization Huge Total

Addressable Market

Target Global

Markets >$4.8t

Current Markets >$1.3t

Current Solutions ~30 bps

Total Addressable

Market >$28.0b

Current Markets

and Solutions

>$4.4b

Global Platform ~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 long term very high revenue growth rates

Target Global

Opportunity ~55-60 bps Current

Opportunity ~34 bps

Mobile +5–10 bps

Mobile +4 bps

~$3.9b

Mobile +$0.5b

~$24.0b

+$4.0b


Multiple Long-term Growth Opportunities

Market penetration

Cross-sell solutions

Global expansion

Related markets

Strategic acquisitions

New products

Future

US, Canada, Australia

Western Europe,

Developed Asia

Mining

Oil and Gas

Data

Financing

Price

• Approx. 9% penetration

• 7 primary solutions

• Few multi-product clients

• Bundled sales/ pricing

• Platform strategy

• Project lifecycle from design to operation

• Integrated

solution suite

Submittal Exchange

GradeBeam

PlanSwift

CPM

PlanSwift Submittal Exchange

GradeBeam

PQM

BidOrganizer

LATISTA


Recent Highlights – Continuing to Execute our Strategy

• Year-over year revenue growth of 61%

• Organic revenue growth of 46%

• $19.5 billion construction value added – 84% growth

Pricing Power

Strong Quarterly Results

Operating Leverage

Enhanced Solutions

• Improving gross margin and EPS trajectory

• Gross margins improved from 77% in prior quarter to 79%

• Adjusted EPS loss improved from ($0.19) in prior quarter to ($0.16)

• Increased functionality of existing solutions

• LATISTA adds integrated business intelligence reporting solution

• Continued integration of solutions and progress towards platform

• Implemented CPM price increase for sub usage fees

• Effective on all new projects after February 1

• Adds 2 to 3 basis points of revenue on subcontracted contract value


Quarter Ended March 31, 2014

Financial Overview

Image: Denver International Airport South Terminal Redevelopment, Denver, CO

– a project managed using Textura Construction Collaboration Solutions

Jillian Sheehan EVP and CFO


Quarter Ended March 31, 2014 Highlights

• 61% year-over-year revenue growth

• Organic revenue growth of 46%

Balance Sheet

Adjusted EPS

Strong Revenue Growth

Expense Trends

Adjusted EBITDA

• 50% operating expense growth

• Excludes stock based compensation and amortization of intangible assets

• Beginning to see leverage in business model

• Continuing to invest in technology & development and sales & marketing

• $3.3 mm Adjusted EBITDA loss vs. $2.6 mm loss in prior year

• Focus on supporting growth and strategic initiatives

• Loss narrowing as a percent of revenue

• $0.16 Adjusted EPS loss vs. $0.35 loss in prior year

• Adjusted net loss of $4.0 million vs. $3.4 million in March 2013 quarter

• Weighted average share count increased to 24.8 million

• $72.7 million cash position at March 31, 2014

• Ample liquidity to fund our growth initiatives


$5.7 $6.3

$6.8

$8.5

$9.4

$10.9

$12.0

$13.8

Jun 12 Sep 12 Dec 12 Mar 13 Jun 13 Sep 13 Dec 13 Mar 14

Consistently High Growth Rates

$12.9

$24.0

$40.8

CY11 CY12 CY13

87% 86% 70%

Year-over-year change

109% 92% 51% 65% 65% 72% 77% 61%

Year-over-year change

70% 60% 45% 46% 38% 45% 50% 46% 77% 69% 69%

Organic growth Organic growth


Strong Operating Metrics

1,226 1,175

1,048

1,245

1,467 1,511 1,466

1,712


Projects Added

3,850

4,366 4,624

5,263

5,701

6,225

6,580

7,052


Active Projects

$8.5 $9.2

$7.3

$10.6

$13.6

$23.7

$17.9 $19.5


Client Reported Construction Value Added


Revenue Model – Broad Base of Paying Customers

• Revenue from all users

• Fees are invoiced and collected in advance

• Highly sticky, recurring, and visible

CPM

PlanSwift

Submittal Exchange

GradeBeam

PQM

Activity-driven

• Owners/GCs • Subscription fees based on

project activity – total number of projects/construction value

• Subcontractors • Project usage fee – varies by

value of contract

Organization-driven

• Primarily organization annual subscription fees

• Fees based on: • Construction volume,

number of offices/subcontractors

BidOrganizer

LATISTA


Calendar 2014 Guidance

• 57 - 60% year-over-year revenue growth

• $14.7 – $15.0 million

• Includes $0.6 – $0.8 million LATISTA contribution

• Adjusted EPS of ($0.12) – ($0.14)

• Excludes stock based comp of $1.8 million & amortization of acquired intangible assets of $1.3 million

• Assumes ~25.0 million shares

• Includes ($0.04) - $(0.05) impact from LATISTA

Quarter Ended June 30, 2014

Calendar Year 2014

• Updated for change in fiscal year end to December 31st

• 56 - 61% year-over-year revenue growth

• $63.6 – $65.6 million

• Includes $3.0 – $3.7 million LATISTA contribution

• Adjusted EPS of ($0.32) – ($0.41)

• Excludes stock based comp of $6.8 million & amortization of acquired intangible assets of $5.0 million

• Assumes ~25.3 million shares

• Includes ($0.15) - $(0.18) impact from LATISTA


Long-term Operating Model Yields Highly Attractive Margins

CY2013 March 2014

Quarter CY2014

Guidance Target Model

Revenue $40.8

Million $13.8

million $63.6 - $65.6

million $150 – 180

million

Adjusted Gross Margin* 76% 80% 87% - 90%

Adjusted operating expenses* as % of revenue General and administrative Sales and marketing Technology and development Total Adjusted operating expenses*

43% 30% 41%

142%

35% 33% 37%

129%

12% - 15% 17% - 20% 15% - 17% 45% - 52%

Adjusted net loss margins* (49)% (29)% (12) - (16)% 35% - 45%

* Adjusted for stock-based compensation, acquisition-related costs, and other non-recurring expenses.


Image: World Trade Center Transportation Hub, New York, NY – a project managed using Textura Construction Collaboration Solutions

Questions . . . and Thank You


GAAP to Non-GAAP Reconciliations

Quarter Ended March 31, 2014

GAAP

Non-GAAP

Adjustments As Adjusted

Percent of

Revenue

Revenues 13,787$ -$ 13,787$

Operating expenses

Cost of services 2,882 (175) 2,707 20%

General and administrative 6,055 (1,242) 4,813 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 (3,292) 17,730 129%

Loss from operations (7,235) (3,943)

Total other expense, net 25 - 25

Loss before income taxes (7,260) (3,968)

Income tax provision 80 - 80

Net loss (7,340)$ (4,048)$ (29)%

Gross margin 10,905 11,080 80%


GAAP to Non-GAAP Reconciliations

Year Ended December 31, 2013

GAAP

Non-GAAP

Adjustments As Adjusted

Percent of

Revenue

Revenues 40,766$ -$ 40,766$

Operating expenses

Cost of services 12,808 (3,094) 9,714 24%

General and administrative 25,152 (7,751) 17,401 43%

Sales and marketing 15,153 (3,097) 12,056 30%

Technology and development 20,820 (4,151) 16,669 41%

Depreciation and amortization 5,325 (3,397) 1,928 5%

Total operating expenses 79,258 (21,490) 57,768 142%

Loss from operations (38,492) (17,002)

Total other expense, net 2,530 - 2,530

Loss before income taxes (41,022) (19,532)

Income tax benefit (767) 1,086 319

Net loss (40,255)$ (19,851)$ (49)%

Gross margin 27,958 31,052 76%

textura march 2014 quarter earnings slides v final

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