Jefferies Conference First-Quarter 2013

Transcription

1 Jefferies Conference First-Quarter 2013 Scott Dussault Chief Financial Officer 9 May Copyright 2013 Copyright Demandware, 2013 Demandware, Inc. All other Inc rights reserved.

2 Forward-Looking Statements This presentation includes forward-looking statements. Demandware, Inc. ( Demandware or the Company ) has based these forward-looking statements largely on its current expectations and projections about future events and financial trends affecting its business. Forward-looking statements should not be read as guarantees 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. Forward-looking statements are based on information available at the date of this presentation and management s good faith belief as of such date with respect to future events, 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: the Company s ability to attract new clients to enter into subscriptions for its solution; the Company s ability to service those clients effectively and induce them to renew and upgrade their deployments of the Company s solution; the Company s ability to expand its sales organization to address effectively the new industries, geographies and types of organizations the Company intends to target; the Company s ability to accurately forecast revenue and appropriately plan its expenses; continued acceptance of SaaS as an effective method for delivering software solutions; the Company s ability to protect and defend its intellectual property; costs associated with defending intellectual property infringement and other claims; events in the markets for the Company s solution and alternatives to the Company s solution, as well as in the United States and global markets generally; changes in the competitive environment in the Company s industry and the markets in which the Company operates; and other factors discussed under Risk Factors and Management s Discussion and Analysis of Financial Condition and Results of Operations in periodic filings with the Securities and Exchange Commission (the SEC ). In addition, in this presentation, the words believe, may, will, estimate, continue, anticipate, intend, expect, predict, potential and similar expressions, as they relate to the Company, business and management, are intended to identify forward-looking statements. In light of these risks and uncertainties, the future events and circumstances discussed in this presentation may not occur, and actual results could differ materially from those anticipated or implied in the forward-looking statements. Forward-looking statements speak only as of the date of this presentation. You should not put undue reliance on any forward-looking statement. The Company assumes no obligation to update any forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting future performance or results, except to the extent required by applicable laws. If the Company updates one or more forwardlooking statements, no inference should be drawn that it will make additional updates with respect to those or other forwardlooking statements. 9 May

3 Key Investment Highlights Large Addressable Market with Strong Macro Tailwinds Leading On-Demand ecommerce Platform with Large Partner Ecosystem Differentiated, Proprietary SaaS Technology Creates Strong Barriers to Entry Multiple Avenues to Drive Future Growth Powerful SaaS Financial Model Experienced and Deep Management Team 9 May

4 Significant Momentum: On-Demand is In Demand! Mar. 31, 2009 $2.5M 100% SaaS Mar. 31, 2013 $18.9M 66% CAGR $487K $260K 79% 50% 9 May

5 Demandware Is at the Confluence of Three Significant Markets 10% CAGR ( 11 16) 20% CAGR ( 11 16) Global ecommerce $327 Billion Global Saas $14 Billion Global Retail $12 Trillion Data Reflects 2011 Source: Forrester (US Online Retail) and Euromonitor (Global Retail and Global ecommerce) 9 May

6 Global Retail Market Shifting from Offline to Online ecommerce: An Essential Requirement for Retailers / Brands Today Consumers Connected, In Control Always On, Always Consuming Buying and Selling Across Multiple Touch Points Retailers / Brands Deliver Exceptional Online Experience 2004 PRESENT FUTURE Laptop / Desktop QR Enabled Print Ads Call Center Tablet Content Web Sites Ad Networks Digital TV Mobile Social Media Endless Aisle NFC Geolocation Services Clienteling mpos Check Out On Smart Phone 9 May

7 Traditional ecommerce Solutions Have Been Limited Build and Run Internally User Interface The Pros: Control Customization The Cons: Costly IT-Constrained Performance/Security Responsibility Slow Pace of Innovation Store Front Portal Business Rules Catalog Management Order Management ecommerce Infrastructure Customer Management Scheduling Shopping Cart Promotion & Pricing Security Admin Portal Accounting Warehouse Manageme nt Content Management POS Connectors 9 May

8 Traditional ecommerce Solutions Have Been Limited Build and Run Internally The Pros: Control Customization The Cons: Costly IT-Constrained Performance/Security Responsibility Slow Pace of Innovation Outsource / ASP The Pros: Less Hassle No Infrastructure The Cons: Inflexible No Merchant Control of Merchandising Limited Customization 9 May

9 Demandware Delivers The Best of Both Worlds Build and Run Internally Outsource / ASP The Pros: Control Customization The Cons: Costly IT-Constrained Performance/Security Responsibility Slow Pace of Innovation The Best of Both Worlds The Pros: Less Hassle No Infrastructure The Cons: Inflexible No Merchant Control of Merchandising Limited Customization A Unique and Better Approach to Digital Commerce 9 May

10 The Demandware SaaS Model Initial Table Stakes Today s Differentiators Reliable and Proven 99.98% Platform Availability + Fully Customizable Merchant Empowerment Ease of Development Cutting Edge Easy Fast Provides Full Control Open Development Environment; Flexible, Extensible Access to Steady Stream of New, InnovativeFunctionality as Soon as it Becomes Available Simplifies Complex ecommerce Functionality Time-to-Market Only 6 Months No Infrastructure SaaS Solution Significant Barriers to Entry 9 May

11 Allowing Retailers to Focus on Innovation and Growth The Payoff to Customers Ability to Innovate at the Pace of Consumer Expectations: Speed to Utilize New Technologies/Techniques Enablement of Merchandising Goals Increased Revenues Enables Seamless Omnichannel Brand Launching and Managing Ease of $ Experience for Multiple ecommerce Sites Consumers Globally 9 May

12 Leading Brands Choose Our Model Websites Customers May

13 9 May Copyright 2012 Demandware, Inc. CONFIDENTIAL 13

14 Key Financial Highlights Growth Visibility Operating Leverage Growth in Customers and Sites 87% Revenue CAGR ( ) Customer Lifetime Value 100% SaaS Model Highly Visible and Predictable High Dollar-Value and Customer Retention Highly Leverageable Margins Capital Efficient Long-Term Scale and Profitability 9 May

15 Revenue Growth Momentum Annual Revenue Growth $ in Millions 44% $79.5 Pro-Forma* Three Month Revenue Growth $ in Millions 55% $20.5 $14.2 $ % $ % $36.7 $47.2 $67.9 $12.2 $21.4 $28.7 $ Month Month 2013 * Pro-forma excludes $1.4 mm from Neckermann GmbH Services Subscription 9 May Copyright 2012 Demandware, Inc. CONFIDENTIAL 15

16 Significant Growth in Customers and Sites Websites Customers Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q May

17 Driving Significant Revenue Momentum Subscription Revenue: Base vs. Overage Base Subscription Revenue Overage Subscription Revenue $16.3 $13.6 $15.2 $16.3 $22.9 $18.9 Average Overage Fees Represent 31%* of Subscription Revenue $10.2 $9.3 $10.4 $11.2 $3.7 $4.3 $6.3 $5.5 $6.1 $6.9 $1.8 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q * Average for 2009, 2010, 2011 and May

18 Land and Expand Drives Shared Success Model Average Subscription Revenue by Quarter (Cohort Analysis) $200,000 Quarterly Revenue $160,000 $120,000 $80,000 Customer Expansion Base Subscription $40,000 $0 Q1 Q2 Q3 Q4 Year 1 Q1 Q2 Q3 Q4 Year 2 Q1 Q2 Q3 Q4 Year 3 Cohort analysis includes a family of third-party solution partner customers who share a minimum level of subscription revenue and 32 customers all of which have been operating on Demandware s platform for a minimum of three years as of December 31, Analysis excludes two customers operating on the platform for three years one invoiced through a third party and Neckermann. 9 May

19 High Quality Revenue: Diversified, Predictable and Sticky Diversified Customer Variety International Scope Apparel General Merchandise U.S. International 59% 41% Customers with Sites in 20+ Countries Health & Beauty and Sticky Home & Garden Sporting Goods Other Subscription Dollar Retention Rate* Typical Contract: 3 Years 100+% 100+% 100+% * Subscription Dollar Retention Rate Defined on Page 39 of the S-1. 9 May

20 Path to Profitability and High Operating Leverage Operating Margin: Annual $2.0M $0.7M $(0.1)M $(24.3)M $(9.6)M Non-GAAP Operating Margin* Non-GAAP Operating Margin %* Operating Margin: Quarterly $0.3 $2.1 $3.4 $5.6 ($0.1) ($0.4) ($0.5) ($0.9) ($1.2) ($1.5) (2.8) ($1.4) ($3.3) *Non-GAAP excludes stock-based compensation expense 9 May

21 Key Investment Highlights Large Addressable Market with Strong Macro Tailwinds Leading On-Demand ecommerce Platform with Large Partner Ecosystem Differentiated, Proprietary SaaS Technology Creates Strong Barriers to Entry Multiple Avenues to Drive Future Growth Powerful SaaS Financial Model Experienced and Deep Management Team 9 May

22 Jefferies Conference First-Quarter 2013 Scott Dussault Chief Financial Officer 9 May Copyright 2013 Copyright Demandware, 2013 Demandware, Inc. All other Inc rights reserved.