Investor Presentation May Stephen Wiehe, CEO Rudy Howard, CFO

Transcription

1 Investor Presentation May 2015 Stephen Wiehe, CEO Rudy Howard, CFO

2 FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements. Forward-looking statements include information concerning SciQuest s possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities, potential market opportunities, the effects of competition and other factors that could impact future performance. In particular, forward-looking statements include references to future finance performance. Forward-looking statements consist of statements that are not historical facts and can be identified by terms such as, but not limited to, accelerates, anticipates, believes, could, seeks, estimates, expects, intends, may, plans, potential, predicts, projects, should, will, would or similar expressions and the negatives of those terms. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Certain of these risks are discussed in Part I, Item 1A, Risk Factors and elsewhere in SciQuest s most recent Annual Report on Form 10-K and other reports, as filed with the United States Securities and Exchange Commission ( SEC ). In particular, we call your attention to the risk factors in our Annual Report on Form 10-K entitled Our actual operating results may differ significantly from our guidance, If we are unable to attract new customers, or if our existing customers do not purchase additional products or services, the growth of our business and cash flows will be adversely affected, Our failure to sustain our historical renewal rates, pricing and terms of our customer contracts would adversely affect our operating results and We are subject to a lengthy sales cycle and delays or failures to complete sales may harm our business and result in slower growth. The company s SEC reports are available free of charge on the SEC's website at or on the company s website at All forward-looking statements in this presentation are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of Also, forward-looking statements represent management s beliefs and assumptions only as of the date of this presentation. Except as required by law, SciQuest assumes no obligation to update these forward-looking statements publicly or to update the reasons actual results could differ materially from those anticipated in these forwardlooking statements, even if new information becomes available in the future. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. 1

3 LEADING PROVIDER OF SPEND MANAGEMENT Vision Be the provider of choice for cloudbased business automation solutions for spend management Fast Facts Research Triangle Park, NC ~550 employees Largest publicly-held pure play in our space Founded in 1995 / IPO in

4 OUR BUSINESS What we do: Turn Spending into Savings Reduce spend Gain control Optimize efficiency Provide a unified view customers and suppliers How we do it: Cloud-Based Solutions Broad solution suite and stand-alone offerings Compelling value proposition SaaS model and end-to-end network Customer focus drives loyalty and long-term relationships 3

5 INVESTMENT HIGHLIGHTS Leading provider of spend management software Differentiated, cloud-based platform Large, underpenetrated addressable market Proven ROI / highly-satisfied customers High recurring revenue / multi-year subscriptions Strong cash flow conversion Attractive, long-term growth opportunity 4

6 SIGNIFICANT GROWTH OPPORTUNITY Total Addressable Market $14 billion Captured Spend $4.2 billion Uncaptured Spend $3,300mm Commercial Higher Education State and Local Government Healthcare Large, growing and underpenetrated market Internal estimates for addressable market sizing based on Gartner s Forecast: Enterprise Software Markets, Worldwide, , 4Q14 Update. Captured spend estimate excludes federal government spending. Total market opportunity from Gartner Software Marketshare Report Q

7 MARKET NEEDS WE ADDRESS SCIQUEST SUPPLIER NETWORK SPEND ANALYSIS SUPPLIERS SOURCING CONTRACTS SHOPPING INVENTORY ACCOUNTS PAYABLE Understand & Manage Your Spend Invite, On-Board & Manage Create & Manage Sourcing Events Author & Manage Contracts Increase Contract Compliance & Savings Integrate & Track Supplies Streamline Invoice Management SPEND RADAR TOTAL SUPPLIER MANAGER ADVANCED SOURCING OPTIMIZER SOURCING DIRECTOR CONTRACT DIRECTOR SPEND DIRECTOR REQUISITION MANAGER ORDER MANAGER INVENTORY ACCOUNTS PAYABLE DIRECTOR SciQuest Spend Management Suite (SaaS) Significant cross-sell opportunity. On average: ~55% use one solution vs. ~45% use four solutions 6

8 WHY CUSTOMERS CHOOSE SCIQUEST Point solution providers Depth / Breadth + Supplier Network Singular focus on spend management Easy to use / highly configurable Suite Players ERP Enterprise-grade SaaS platform / infrastructure Broad, growing and modular solutions Loyal, satisfied customers No per user or transaction fees No-fee supplier network 7

9 VALUE OF THE SCIQUEST SUPPLIER NETWORK Value Propositions: Customers Simple, fast and efficient Manage and share accurate data Automate supplier onboarding Hub and Spoke System: Efficient, transparent and cost effective Suppliers SQI is the supplier preferred network Single application to manage customer communications and commerce Access to local supplier enablement team SciQuest Highly scalable network Minimize number of connections and spread costs over many customers 8

10 PROVEN RESULTS DRIVING CUSTOMER ROI Reduction of maverick spend (i.e., increase spending with vendors that provide preferred contract terms) Improve contracts enhance existing and obtain new Enhanced business intelligence Greater efficiency and improved cycle times Enhanced visibility and control over processes Better risk management and compliance Normalized and categorized more than 75,000 suppliers, and classified $3 billion of spend (>98%) within 12 weeks. Dramatically reduced time required to produce reports and analysis. Usage of SciQuest s solution helped to identify several additional opportunities for savings. Vulcan Materials Company Achieved average savings of up to 22 percent on IT, office supplies and lab purchases in only eight months Bryn Mawr College We plan to save $200 million over five years with SciQuest University of California Greater than 100 percent return on investment. Increased contract compliance by 35 percent. 92 percent of searches result in one or more product matches Top Global Pharmaceutical Company We've had a deep, strategic relationship [with SciQuest] since Since then we estimate that we've realized approximately $1.5 billion in savings using their software. Leading consumer packaged goods company Many solutions generate an average ROI of 10x 9

11 500+ CUSTOMERS 10

12 LONG-TERM PRIORITIES To support growth and profitability 1. Attract new customers 2. Increase cross-selling 3. Expand and enhance the solution suite 4. Drive operational and financial efficiency 11

13 FINANCIAL OVERVIEW Rudy Howard, CFO

14 FINANCIAL HIGHLIGHTS High recurring revenue retention rates - Exceptional customer retention rates Excellent long-term growth opportunities - Investing in solution suite - Robust cross-selling Strong margins and adjusted free cash flow - Ability to expand margins and cash flow conversion 13

15 MONETIZING TRUSTED RELATIONSHIPS Annual recurring revenue retention rates of near 100% (1) 100% 106% 100% 96% ) Recurring revenue retention rates are calculated by comparing the subscription revenue for all customers at the end of the prior period to the subscription revenue for those same customers at the end of the current period. 14

16 BUSINESS MODEL PROVIDES PREDICTABILITY Annual Visibility Quarterly Visibility 15% 5% 35% 45% <5% <5% 10% 5% 15% 10% 20% 80% 30% 95% 85% 75% 45% 25% Current Year CY + 1 CY + 2 Current Quarter Quarter + 1 Quarter + 2 Backlog Renewal Revenue Revenue From New Sales Annual revenue builds are as of 1/1/15. Quarterly revenue make-up as of 1 st day of current quarter. 15

17 INVESTMENT HIGHLIGHTS Leading provider of spend management software Differentiated, cloud-based platform Large, underpenetrated addressable market Proven ROI / highly-satisfied customers High recurring revenue / multi-year subscriptions Strong cash flow conversion Attractive, long-term growth opportunity 16